India to talk tough with US on H-1B, L1 visa fee hike in 2016: Nirmala Sitharaman

India will try resolve the totalization agreement on social security too.

AB Wire

India would like to amicably resolve the issue of the arbitrary hike in H-1B visa and L1 visa fees imposed by the US government through talks, but would not hesitate to take them to the World Trade Organization to try settle it in India’s favor, said India’s commerce minister Nirmala Sitharaman in a television interview.

Sitharam, talking to CNBC-TV18’s anchor Shereen Bhan in an exclusive interview, and the transcript of which was uploaded by Moneycontrol.com, made it amply clear that India has been surprised by the sudden US move, which has gone contrary to all the bonhomie between the two countries. The visa fee hike is expected to hit India’s IT companies by at least $400 million annually.

“India has taken it up in a very big way,” Sitharaman responded on India’s reaction to the move. “The last meeting that we had with the US trade representative in the US, I had raised this issue. We had asked for them to look into it with all seriousness because this is going to hurt us. We have also established the same, Nasscom has come up with a study which I remember releasing it when I went for the strategic commercial dialogue in the Brookings Institute wherein it was established that Indian IT companies had invested in a very big way in the US and they are not taking away jobs. Jobs are being created in the US not for Indian citizens, jobs are being created for the US citizens. The number of jobs that are being created have all been given in figures.”

The US had recently doubled the fees for certain categories of H-1B and L1 visas to $4,000 and $4,500, respectively. H-1B and L1 visas are temporary work visas for skilled professionals. India is the largest user of H1B visas (67.4 per cent of the total 161,369 H1B visas issued in FY14 went to Indians) and is also among the largest users of L1 visas (Indians received 28.2 per cent of the 71,513 L1 visas issued in FY14), the Hindu had reported.

President Barack Obama recently signed into law a $1.8-trillion tax and spending Bill. Among other things, it authorized the visa fee hike applicable to companies employing 50 or more, and with over 50 per cent of their employees in the U.S. on H-1B and L1 visas.

The money raised is likely to be over $1 billion every year, and will be utilized to finance a biometric tracking system and healthcare requirements of the 9/11 terror attack victims.

When prodded further on the issue of the visa fee hike, Sitharaman reiterated that Indian companies had created plenty of jobs in the US.

“…we highlighted this to say what are you doing, we are not taking away your jobs. On the contrary we are coming and investing and creating jobs and this is actually giving a certain buoyancy to the US economy. By doing this you are going to hurt our industry which is otherwise very willing to work with you. I have raised this with the United States Trade Representative (USTR). At that time instantly there wasn’t a response given to us. They said alright we will have to look at it and we are discriminating India, this is applicable to everybody but we are following it up. I am sure this is not going to be the last that you will hear. I will be following it up definitely with USTR. It is a matter of serious concern,” she said.

When Bhan asked her if “there be a possibility to in fact even take this matter to the WTO settlement body?”, Sitharamn said: “That is a bit later, if it is necessary. I hope it won’t be necessary to go to the WTO on it,” adding that she intends to take it up early in the new year after the holidays are over.

When asked if she is “disappointed with the fact that despite this bonhomie between the US and India and we like to call each other strategic partners and natural allies and so on and so forth there hasn’t really been much in terms of reciprocal behavior that we have seen from the US specifically to do with the IT sector and the IT sector is concerned it is totalization (agreement),” Sitharaman responded:

“Absolutely and the answer given in that case is that we do not have an insurance in social security policy in India which is comparable with what exists in the US and therefore they don’t think it will be right for them to give away but nevertheless it is the Indian workers’ money and that is getting locked up there and we have raised how unfair it would be for the US to tell us that in your country you do not have a certain law which is comparable with mine. In fact I did say in India there is a culture of the family. Whether it is right or wrong, whether in today’s situation whether you need a social security law or not I am not getting into that debate. But I did say this that in India there has been a culture that the family supports everybody. Elderly are taken care of by the family, unemployed youth are taken care of by the family. Children are not driven out of the house at 16 saying you take your job and live your life. The family has been the biggest social security net for every individual and if I say that this system doesn’t prevail in the US will it work, it won’t. Each country has its own way of doing things and in a smallish way, it has had a big impact. The government has brought in various bima yojanas which is covering every Indian citizen. So, I said if you want to have a universal coverage of a bima yojana this is what it is. The government has brought it in. So, I have raised it from the point of view the typical situation which prevails in India which cannot be compared with the US.”

Interestingly, the interview ended with Sitharaman putting something squarely on the table: India will adopt a tough approach to the US in 2016.

To the question what would India’s priorities be in 2016, and if it’s going to take a tougher approach to the US, the minister responded: “I think so, yes.”