India filed a World Trade Organization (WTO) complaint with the U.S. on March 3, 2016, over the recent U.S. law increasing H-1B visa fees. The new law which came into effect on December 18, 2015 requires certain companies to pay an additional $4,000 in application fees. The fee hike applies to U.S. companies that employ 50 or more employees in the U.S., with more than 50 per cent of those employees in H-1B or L non-immigrant status.
The H-1B visa program allows employers to bring up to 65,000 foreign workers to the U.S. each year to fill jobs that require "highly specialized knowledge." Critics of the program argue that many companies take advantage of the H-1Bs to displace American workers by importing foreign workers for lesser wages. The new law increasing visa fees was passed by the U.S. Congress as a bipartisan effort under increasing pressure from interest groups and lobbyists to protect the interests of American workers.
The H-1B fee hike will affect the information technology industry in India from which huge numbers of H-1B petitions are submitted every year with the U.S. government. India generates more than $100 billion from its IT sector that thrives largely by sending Indian workers to the U.S. and other countries to develop software and set up computing systems. The H-1B visas are typically used by thousands of Indian nationals hired by IT companies operating in the U.S. Analysts say that the fee hike will bring down profit margins of big Indian IT players - Tata Consultancy Services (TCS) and Infosys starting this fiscal year in April.
In its complaint, India has stated that the new U.S. visa measures seemed inconsistent with WTO commitments the U.S. had made, because the move treats Indian IT workers in the U.S. less favorably than their American counterparts. India states that the new measure to double the cost of visas for these skilled workers constitutes protectionism and violates the WTO's principles for fair trade.
The two countries are preparing for bilateral discussions probably in Geneva where the trade dispute arbiter is based. If no mutual agreement is reached within 60 days of India's complaint of March 3rd, India can request the WTO to establish a panel to review the matter. It is likely this may not be resolved until after the U.S. presidential election in November of this year.
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