India may drag US to WTO over visa fee hike issue | delhi | Hindustan Times
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India may drag US to WTO over visa fee hike issue

delhi Updated: Aug 17, 2010 21:05 IST

AFP
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India said on Tuesday it may take the United States to the World Trade Organisation over a "protectionist" US move to hike work visa fees that will hit the country's flagship outsourcing sector.

The new law earmarks funds from the visa fee hike to pay for the US government's plans to boost security along its border with Mexico to crack down on illegal immigration and drug smuggling.

India "cannot keep quiet" on an issue that hurts its commercial interests, Rahul Khullar, the top bureaucrat in the commerce ministry, said in New Delhi.

The visa fee hike "is WTO incompatible," Khullar said, adding the government was now deciding its "next course of action" which could include challenging the US legislation before the World Trade Organisation.

The 600-million-dollar measure, signed into law last Friday by US President Barack Obama, will nearly double visa fees for some Indian information technology workers entering the United States.

The National Association of Software and Services Companies (NASSCOM), which represents India's top software exporters, has said the measure will boost annual US visa costs for the sector by 200-250 million dollars annually.

The US legislation affects those skilled workers brought in by companies whose employees are more than 50 per cent foreign, a move that largely affects India's IT and outsourcing industries.

US high-tech firms such as Microsoft, which bring skilled immigrants into the United States on the same visas, will not be hit because the vast majority of their workforce is American.

More than half of the world's top 500 companies outsource work to India, which has become the world's back office where Western firms have set up call centres and number-crunching and software development outlets to cut costs.

But the industry also flies employees to the US each year to work at their clients' locations as on-site technicians and engineers.

Under the law, fees for non-immigrant 'H1B' and 'L' visas go up by 2,000 dollars for firms with more than a 50 per cent non-American workforce. The fee now is 2,500 dollars.

Anti-outsourcing sentiment in the United States has been stoked by high unemployment.