India takes US to the WTO on visa fee hike

India has approached the Dispute Settlement Mechanism of the WTO against the US government’s decision to make an abnormal hike in visa fees.

According to the WTO officials, India has initiated a dispute settlement procedure at the WTO by inviting the US to make a consultation on the issue.

 As per the WTO’s Dispute Settlement Body’s procedure, consultation between the two countries is the first step in dispute settlement.

WTO gives a 60 day time line for the members to settle their dispute through consultation. If it is not resolved, then only the next step of framing a panel on the dispute will be made. From here onwards, the WTO’s DSB will hear case on the subject matter.

Most of the cases are usually settled at consultation level itself.

Violation of TRIMs

According to initial indications, India challenged the US decision on the ground that the visa hike has adversely affected the right of Indian firms’ which are explicit under the TRIMs (Trade Related Investment Measures).

The hike has violated the national treatment principle provided under TRIMs. The principle of ‘national treatment’ says that foreign companies will be treated on a par with local firms.

Visa fee hike results in less favourable treatment for Indian companies compared to US companies engaged in providing same services.

The Visa hike issue

Last year, the US government has doubled two major employment visa fees (H1B and L-1) to raise the US workforce in IT companies. Visa fee hike was made damaging for Indian IT firms in the US that have nearly 50 to 70% workforce recruited from India.

Visa fee was doubled to $4,000 for H- 1B and to $4,500 for L-1

Several Indian companies complaint that US doesn’t have the required volume of professionals to meet the skill set. According to Nasscom, the new fee will cost about $400 million a year for the Indian IT industry.