India, peeved with fine on Infosys, will take US to the WTO

Will again raise complaint of unfair hike in visa fees.

By Deepak Chitnis

WASHINGTON, DC: As a result of the US government’s $35 million crackdown on IT company Infosys, the Indian government is planning to re-instigate its complaint with the World Trade Organization (WTO) that America is unfairly hiking up visas fees for Indian workers.

India originally brought the case up with the WTO in 2011 because of a law the US passed the previous year that raised fees for H-1B and L-1 visas for any company that employs more than 50 people in the US or has at least 50% of its employees coming from foreign countries (the 50/50 rule, as it is known colloquially).

The increase from $2,320 to $4,500 per application, India said, was directed specifically at them because of the sheer volume of highly skilled workers that go from India to the US annually, particularly for IT companies like Infosys, Wipro, and others. The current fees for each visa are in effect until 2015, having started in 2010 as part of the Border Security Act and being extended by the James Zadroga Act in 2011.

The case lasted until early in 2012, when it was dropped by the WTO because the Indian government “failed to obtain the required data” from the Indian IT companies listed in the complaint. But now, according to a story in Business Standard, the Indian Commerce Department is saying it never completely dropped the case; rather, it was waiting for the best time to bring the case back.

“It is the sovereign right of any country to hike visa fee, but the US move is mainly against the Indian IT companies,” the Indian Commerce Department said in April of 2012. “The law discriminates between an American and Indian company. This is a breach of national treatment and most favored nation status.”

The official complaint is that the US is in violation of WTO regulations imposing monetary punishments on the commercial presence of one country in another, and the movement of professionals between countries. Additionally, India says it has been targeted because it is not a signatory on the WTO’s Government Procurement Agreement, for which the US charges an additional 2% tax.

The WTO was created in 1995 as an international body overseeing and regulating international commerce among countries that are members. India and the US are both member nations of the WTO, although they haven’t necessarily signed onto the same agreements; in regards to the aforementioned Government Procurement Agreement of 1996, the US is a signatory while India is merely an “observer.”

One Comment

  1. cry me a river. infosys got caught. own it. count your blessings that you are still allowed to do business in the US, infosys. as for discrimination, infosys is 90+ indian employees in the US. tread lightly.

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