India sees early solution to US visa imbroglio

Weeks after the US passed the contentious work visa law, India sees a softening of stance by that country even as it hopes for a solution before the India-US trade policy meeting, likely to take place next month.

While the government is hoping for an early answer to stop the imbroglio from spreading, US State Department spokesman P J Crowley has already given a statement that it would discuss the matter with Indian officials and examine whether the bill is compliant with the World Trade Organization (WTO) norms.

“The US will follow a diplomatic channel and would explore ways to seek a solution to the matter. There has been a change in their tone. The matter has been taken up with them very seriously and they have understood our concerns. After all, we are the biggest user of Mode 1 and Mode 4. The message has been heard,” a senior official from the Ministry of Commerce and Industry told Business Standard.

In trade parlance, Mode I refers to cross-border supply such as ITeS and BPO services, while movement of skilled professionals is called Mode IV.

The official also added that Commerce and Industry Minister Anand Sharma would take up the issue with his counterpart, Ron Kirk, while senior official-level talks are already on. He said that the Indian government was “hopeful of a quick solution” before the India-US trade policy forum, which is expected to start within the next three-four weeks and the visit of US President Barack Obama in November.

Last week, Sharma had written a strongly-worded letter to US Trade Representative Kirk calling the bill to be “highly discriminatory”. According to Commerce Secretary Rahul Khullar, provisions of the bill are not compliant with WTO norms and it hurts India’s commercial interests. The ministry would weigh options to fight it out in the WTO appellate tribunal. This is the only ministry that has raised its voice ever since US has announced its intentions.

According to the Bill work related visas such as the H1B and L would now cost an additional $2,000 over and above the current rate, which is $2,000-$2,500.

Sharma had also said there will be a cost implication of around $200 million annually for companies, especially in the IT sector, that sends professionals to work in the US as part of various projects. The move will also impact companies of Indian origin, that account for about 12 per cent of the total visas issued by the US, the minister said.

According to the National Association of Software and Services Companies, this will increase the annual visa cost for India’s $50 billion outsourcing industry by $200-250 million annually. The US government grants 80,000-85,000 of such visas to Indian firms annually. The bill is aimed at raising funds for the $600-million US-Mexico border security programme.