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US plans to talk to India about H-1B and L-1 visa fee hikes

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The US has planned to hold a discussion with India in April over the recent H-1B and visa fee increase. According to the Indian media statement, it mainly disturbs the Indian owned companies in the US. The US has agreed discussions following India’s complaint against its move to raise visa fees for non-immigrant workers at the World Trade Organization (WTO).

Indian Government, Ministry of Commerce is functioning with a set of legal mentors to validate that the visa rules victimize Indian IT organizations working in the US. “We want the US to see our point of view at the consultation stage itself and revoke the visa fee hike, but this is unlikely to happen. We have to be ready to fight a case at the dispute panel. Our legal team is trying to prove violation of WTO rules on both de facto (in effect) and de jure (by law) basis,” the Commerce Ministry official said.

According to Nasscom Assessment:
The change would affect losses estimated at $400 million for Indian IT firms. The Ministry of External Affairs (MEA) said: “The MEA is intense to settle the matter during the WTO consultation process as it does not want yet another problematical situation with the US on trade and economic matters.”

This will be a challenging case for India to argue at the WTO as the legislation is applicable on all companies and doesn’t explicitly target Indian companies. Official said: “Our legal team has to prove that discrimination is taking place by providing data which shows that it is only Indian companies that are getting affected because of the increased visa fees and not the American companies”. The US has suggested April 5-6 as probable dates for consultations. We look at the readiness of our officials around that time and respond accordingly.

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US hikes H-1B and L-1 visa fees

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The visa fee increases for an H-1B visa and the L-1 visa. This visa fee increase has caused friction between India and the US expectedly. Recent report says that Indian IT firms have decided to increase the client and the processing fees more which will soften the blow of increased costs due to fees being doubled for US H-1B and L-1 visas.
Under the new law, employers that employ 50 or more employees in the United States, and where more than 50% of such employees are working under H-1B or L-1 status, will be required to pay an additional filing fee of:

  • $4,000 for H-1B petitions (including H-1B extensions), and
  • $4,500 for L-1 petitions (including L-1 extensions).

One of the largest Indian IT outsourcing companies in India, TCS, said that it’s likely to record a 10 per cent increase in profitability in its December quarter, while Infosys is expected to report a 3 percent rise in profits, according to Thomson Reuters data.

Nasscom and The Economic Times says:
According to Indian IT body Nasscom, this is expected to have an impact of about $400 million annually on India’s technology sector. Indian technology industry paid $22.5 billion in taxes during the financial years 2011-15, besides investing $2 billion in FY 2011-13 in the US as well as supported 4,11,000 jobs in FY2015 directly or indirectly, according to a Nasscom report.

R Chandrasekhar, president of Nasscom, described the fees as ‘unjustified’, and said that they are designed to target Indian IT companies ‘disproportionately.’ “US immigration reform is something that has to occur sooner or later,” Chandrasekhar added.

The Economic Times quoted him as saying: “I don’t think it is an issue at all, $2,000 or $4,000 that doesn’t matter. The important thing is that you have to provide excellent value to customers.” While another leading industry figure, Sanchit Gogia, expects that the affected Indian IT companies will simply pass on the extra charges to their clients.

However, several commentators have stated that the increased H-1B and L-1 visa fees aren’t of great concern. Indian industrialist N. R. Narayana Murthy, co-founder of Infosys, believes that the doubled visa costs will not be a particularly troubling issue.