India has has filed a dispute against the US under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) which constitutes Annex 2 of the WTO Agreement and has requested consultations with the US.
According to the dispute, under the Consolidated Appropriations Act of 2016, Washington increased fees for L-1 type visas by US$4500 and for H-1B type visas by US$4000 for companies with 50 or more employees in the US, if more than 50 percent of their employees are non-immigrants employed on such visas. It was signed into law by President Barack Obama in December 2015, with the measures in place through September 2025.
H1B is work permit for temporary specialty workers while L1 visas are issued for intra-company transfers that allows companies to relocate qualified employees to US offices.
India claims that these measures, along with earlier fee increases between August 2010 and September 2015, appear to violate the US’ commitments under its Schedule of Specific Commitments under the WTO’s General Agreement on Trade in Services (GATS) – the set of global rules involving services trade- along with being inconsistent with other GATS provisions.
India claims that the visa fee increases:
appear to: (i) be inconsistent with the terms, limitations and conditions agreed to and specified by the United States in its Schedule of Specific Commitments under the GATS, (ii) accord to juridical persons of India having a commercial presence in the United States treatment that is less favorable than that accorded to juridical persons of the United States engaged in providing like services in sectors such as the Computer and Related Services sector with respect to which the United States has taken commitments in its Schedule of Specific Commitments, and (iii) affect the movement of natural persons seeking to supply services in a manner that is inconsistent with the United States' commitments in its Schedule of Specific Commitments. These measures also appear to nullify or impair the benefits accruing to India directly and indirectly under the GATS.
In its complaint, India said that the current measures (of visa fee hike) result in less favorable treatment for Indian companies with commercial presence in the US in comparison to US companies engaged in providing like services and according to the GATS Schedule.
This violates the principle of ‘national treatment’ embedded in multilateral trade rules, which lays down that foreign companies will be treated on a par with local firms.
The Government of India is of the view that these and comparable measures, taken by the United States are not in conformity with at least the following provisions of the GATS: Articles XVI, XVII, XX, and paragraphs 3 and 4 of the GATS Annex on Movement of Natural Persons Supplying Services. These measures also appear to be inconsistent with Articles III:3, IV:1 and VI:1 of the GAT
Furthermore, New Delhi is also claiming that recent US changes to its numerical commitment for H-1B visas – specifically due to modifications Washington has made under FTAs with Singapore and Chile – also are inconsistent with its GATS schedule.
According to the consultations request, the US included under its horizontal commitments regarding mode 4 – that involving the movement of natural persons – that it would permit up to 65,000 people annually on a worldwide basis under the category of fashion models and specialty occupations.
Under the two FTAs mentioned above, these “numerical commitments” have allegedly been changed. According to India, US homeland security officials must now set country-specific limits for both countries, with these numbers taken away from the global total of 65,000 receiving H-1B visas.
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