H-1B & L-1 Visa Charge Swell Non-tariff Barrier On India

According to Nirmala Sitharaman--the in-office Indian Minister of State for Commerce and Industry--the latest US H-1B & L-1 Visa charge increases which impact mostly Indian owned firms is a 'non-tariff barrier' on the country.

Non-tariff barriers refer to checks that result from circumstances, bars or specific market conditions that make either importation or exportation of goods pretty hard and pricey.

In the case of India, the non-tariff barrier allegedly refers to workers not products, with H-1B and L-1 visa charge augmentations making it far more expensive to move workers of the Indian tech groups to US workplaces. On December 18, 2015, the incumbent US President, Barack Obama signed the visa fee augmentations into law, as component of the Consolidated Appropriations Act, 2016.

The said Act included legislation to raise H-1B and L-1 Visa charges, which as a result of the Act were headed north by 100%, vis-à-vis the preceding fees that applied to firms with 50 or more workers with more than 50% being on the H-1B & L-1 Visas. The same impacted largely Indian owned groups. While the H-1B Visa cost headed north to $4,000 from $2,000, the L-1 Visa jumped to $4,500 from $2,250.

Reacting to the not-too-positive development, from the perspectives of India, Sitharaman reportedly proclaimed that via raising H-1B and L-1 Visa charges to a preposterously high rate, Washington DC is, in effect, putting a non-tariff blockade on New Delhi. While India is not against shelling-out visa charges, the price cannot be so unreasonably high that it prevents people from getting the visa.

Since 2010, numerous Indian IT groups have been forced to give extra charges for an L-1A or L-1B Intra-company Transfer Visa or an H-1B Visa application, in the process, contributing a great deal of funds towards the expenditure of controlling the US-Mexican border, allegedly, to stop unlawful movement of people.

Firms hiring 50 or more workers in the US, with 50% of their manpower in the nation on an H-1B or L-1 Visa, are subject to the added charges.

It is forecasted that the visa cost increases will prove dear and cost Indian IT organizations an extra $400 million every year, which could greatly affect bottom-lines. But, as per some reports, the fees would not have a high impact on the profits as organizations would get back the money via raising their service charges to customers and reduce costs via duly processing extra work from their India based centres.

As per an industry ballpark figure, the largest IT tech organizations of India--and this comprises Wipro, TCS, Infosys, & Cognizant, among others--account for anywhere between 15,000 and 20,000 visas per annum. Numbers for the 2014 fiscal year reveal that overall 67.4% of the 161,369 H-1B Visas proffered made their way to Indian aspirants. Aspirants from Indian also obtained 28.2% of the entire 71,513 L-1 Visas that were offered.