India challenges US immigration rules at WTO

New Delhi: India has launched a complaint at the World Trade Organisation over the cost of US work visas, which it says are too high and discriminate against a group of Indian IT firms, in the latest sign of prickly trade ties between the two allies.

The complaint is at the level of WTO "consultations" between the two parties - the last step to resolve a disagreement before entering a full-fledged legal dispute.

"India is taking up consultations on this issue and hopes to solve it amicably," an official at the trade ministry said on Wednesday, asking not to be named because of the sensitivity of the matter.

The official did not say when the complaint was taken to the WTO, but said Trade Minister Anand Sharma raised the visa issue with US Commerce Secretary John Bryson on a visit to India on March 26.

Last month, the United States began the same type of action at the WTO to open India's market for poultry meat and eggs, saying an Indian ban on US imports intended to stop the spread of bird flu was not based on sound science.

A US embassy spokesman had no immediate comment.

Commercial ties between India and the United States flourished after India's economic liberalisation in 1991, but in recent years each side have accused the other of erecting unfair barriers to trade and investment growth.

India's economy has benefitted greatly from information technology firms doing offshore work for US companies, but such outsourcing has become an issue in the US presidential campaign, with President Barack Obama vowing to woo jobs home from overseas.

India's complaint is about a US law from 2010 that almost doubled visa fees for skilled workers to $4,500 per applicant. The bill's sponsor, Senator Charles Schumer, a Democrat from New York, said at the time that the move was aimed at a small group of companies exploiting US law to import workers from abroad.

"I think the government of India is right that this is a barrier to trade," Vineet Nayyar, CEO of large Indian software services exporter Tech Mahindra, said.

However, Nayyar said Indian industry did not expect visa fees to be reduced and would either become more efficient or raise prices marginally to offset the cost.

"I think by and large the Indian industry is taking for granted that this will continue and we're trying to see how we can manage it," he said.