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Visa fee increase could impact Indian companies: US

Wednesday, 18 August 2010 - 4:27pm IST | Place: Washington, DC | Agency: PTI
The proposed increase in visa application fee by at least $2,000 for next five years would raise nearly $550 million out of $650 million that have been allocated for increasing the security of the US-Mexico border.

Amid mounting concerns over the move to hike the H-1B and L1 visa fee, the US has said it could have an adverse impact on Indian companies and efforts were underway to mitigate it.

However, Washington exuded confidence that the long-term economic partnership with India would continue to deepen and strengthen.

"We understand the government of India's concerns. We realise it could impact Indian companies that invest in the US and we also understand the potential impact on Indians who work in the US as well as some American businesses," state department deputy spokesperson Mark Toner said.

But, he added, that the US was confident that its long-term economic partnership with India would continue to deepen and provide benefits for both societies.

The proposed increase in visa application fee by at least $2,000 for next five years would raise nearly $550 million out of $650 million that have been allocated for increasing the security of the US-Mexico border.

These fee increases would apply only to companies with more than 50 employees and for whom the majority of their workforce is visa-holding foreign workers.

A summary of a Senate version of the bill named Indian firms Wipro, Tata, Infosys and Satyam, which use hundreds of these visas for their employees coming to the United States to work at their clients' locations as technicians and engineers.

Nasscom estimates that Indian companies, mostly IT, apply for 50,000 visas every year, including H-1B and L1 visas, besides renewal of old visas.

When asked about New Delhi's plans to take the US to the World Trade Organisation on the visa fee hike issue, Toner said, "it is within India's purview to do that."

"I think we remain cognisant of the effect that this legislation may have on India, and we're going to try to work with them to mitigate it. But beyond that, I don't have a reaction. I mean, we have got a robust economic partnership with India," Toner said.

The steep increase in visa fee of certain categories of H-1B and L1 visas was part of the $600 million border security bill signed by the US president Barack Obama to strengthen security along the US-Mexico border.

"This is a grave mistake during a time of economic weakness for the nation. Congress should deregulate visas, not burden their users with more regulations and fees," said Alex Nowrasteh, a policy analyst at Washington-based Competitive Enterprise Institute, said in The Boston Globe.

He said that protectionist aspects of the legislation were worrying.  

Nowrasteh said, "Many foreign technology companies — including Indian giants Wipro, Infosys Technologies, and Tata — outsource thousands of technology workers to the US. They will bear the brunt of these new fees, which will discourage investment in the US and could lead to further protectionist measures worldwide".

"Highly skilled foreign workers were also a boon to public finances. Non-immigrant Indian H1B workers contribute over $1 billion a year in Social Security payments that they don't receive back in benefits," he said.

He argued that instead of raising fees and expanding regulatory costs, lawmakers should do away with workplace inspections, fees, quotas, and other restrictions.

"The economic case for the free movement of labour is as compelling as that for goods and services. In a faltering economy, it is more important than ever," he argued.




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