NEW DELHI: India will issue yet another warning to the United States on the non-compatibility of the recent hike in professional visa fees and imposition of additional import taxes on government purchases with World Trade Organisation, or WTO, rules.
Commerce and industry minister Anand Sharma will take up the issue with US Trade Representative Ron Kirk later this week.
"We are seriously pursuing the issue with the US government as we feel that both the measures violate global trade rules. The minister will discuss the issue at length with the USTR," a commerce department official told ET. Sharma is scheduled to meet Kirk in Washington DC on Wednesday.
India had issued a non-paper or an informal communication to the US earlier this year stating that both the measures, that were part of the country's attempt to fund its enhanced border security plan and health programme for 9/11 victims, flouted multilateral trade norms of the WTO. The US, however, is yet to respond to the communication.
"The minister will try to drive home the point that we are not willing to let go of the issue as the measures have a significant negative impact on Indian business," the official said, adding that the commerce ministry is in consultation with WTO lawyers and is preparing the ground for filing a case if required.
The US increased professional visa fees (H-1B and L-1 visa) by a minimum $ 2,000 for all US-based companies that have more than half of their employees on such visas till 2015. It would mostly affect Indian IT firms, like Infosys and Wipro , and is expected to cost them $200 million annually.
It also imposed an additional import duty of 2% on all government purchases from countries like India that are not part of the government procurement agreement (GPA) of the WTO. Only a handlful of members are in the GPA including the EU, Japan, Switzerland, China, South Korea and Iceland.
A Delhi-based trade lawyer following the issue told ET that while prima facie there is no discrimination against Indians on the issue of visa fee hike, de facto there could be a case of distinction as mostly Indian firms are getting affected by the measure. "The visa issue could be disputed at the WTO if discrimination is proved," the lawyer said.
Levy of higher taxes on imports from non-GPA countries is a ``trickier'' issue because although it is in confirmity with the GPA, there could be compatibility concerns with the General Agreement on Tariffs and Trade or GATT (the agreement that preceeded the WTO) and the General Agreement on Trade in Services or GATS. "It will be interesting to see how the WTO dispute settlement panel will view the issue if India decides to file a dispute against the measure," the lawyer added. Sharma will also meet US under secretary for political affairs William J Burns during his three days visit and address the annual summit of the US-India business council
Commerce and industry minister Anand Sharma will take up the issue with US Trade Representative Ron Kirk later this week.
"We are seriously pursuing the issue with the US government as we feel that both the measures violate global trade rules. The minister will discuss the issue at length with the USTR," a commerce department official told ET. Sharma is scheduled to meet Kirk in Washington DC on Wednesday.
India had issued a non-paper or an informal communication to the US earlier this year stating that both the measures, that were part of the country's attempt to fund its enhanced border security plan and health programme for 9/11 victims, flouted multilateral trade norms of the WTO. The US, however, is yet to respond to the communication.
"The minister will try to drive home the point that we are not willing to let go of the issue as the measures have a significant negative impact on Indian business," the official said, adding that the commerce ministry is in consultation with WTO lawyers and is preparing the ground for filing a case if required.
The US increased professional visa fees (H-1B and L-1 visa) by a minimum $ 2,000 for all US-based companies that have more than half of their employees on such visas till 2015. It would mostly affect Indian IT firms, like Infosys and Wipro , and is expected to cost them $200 million annually.
It also imposed an additional import duty of 2% on all government purchases from countries like India that are not part of the government procurement agreement (GPA) of the WTO. Only a handlful of members are in the GPA including the EU, Japan, Switzerland, China, South Korea and Iceland.
A Delhi-based trade lawyer following the issue told ET that while prima facie there is no discrimination against Indians on the issue of visa fee hike, de facto there could be a case of distinction as mostly Indian firms are getting affected by the measure. "The visa issue could be disputed at the WTO if discrimination is proved," the lawyer said.
Levy of higher taxes on imports from non-GPA countries is a ``trickier'' issue because although it is in confirmity with the GPA, there could be compatibility concerns with the General Agreement on Tariffs and Trade or GATT (the agreement that preceeded the WTO) and the General Agreement on Trade in Services or GATS. "It will be interesting to see how the WTO dispute settlement panel will view the issue if India decides to file a dispute against the measure," the lawyer added. Sharma will also meet US under secretary for political affairs William J Burns during his three days visit and address the annual summit of the US-India business council
