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December 9, 2010

US visa law an 'unfair trade practice' targeting India

     New York: The visa laws of the United States for skilled workers are essentially targeting India, and has caused plenty of heartache to tech firms in Bangalore, Mumbai and the suburb of Gurgaon on the outskirts of New Delhi. The US law is an "unfair trade practice" that runs counter to the World Trade Organization's General Agreement on Trade in Services. The GATS is a 1995 treaty to reduce trade barriers in services that was a result of the Uruguay round of negotiations. "It is a breach of the services agreement," Indian Commerce Secretary Rahul Khullar has told the Wall Street Journal in an interview. A spokeswoman for the U.S. embassy in New Delhi declined to comment. Khullar said India has received assurances from the U.S. that the law will somehow be mitigated so that Indian firms don't face unduly harsh visa restrictions. But he said the solution isn't yet clear. He declined to comment on whether India may eventually pursue a formal trade complaint against the U.S. at the W.T.O if the matter isn't resolved. The U.S. law, which passed in August, raises visas fees for firms with at least 50 employees in the U.S. who already have more than half their U.S. staff on H-1B or L1 visas. While the language doesn't specifically single out Indian companies, a U.S. Congressman discussing the legislation appeared to have India in mind, and Khullar said that is the practical impact. "It is essentially targeting India," he said. Khullar said the U.S. was basically asking India to "pay for security provisions down South." Besides that law, some Indian companies are complaining that the U.S. has significantly tightened its policy for granting work visas, asking for increased documentation and conducting tougher interviews than earlier. Khullar said that outsourcing model has made U.S. firms more competitive and productive.
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