New Delhi: Terming the hike in visa fee as "discriminatory", industry body FICCI on Tuesday said the move will have a negative impact on efforts made by India and the US to build stronger trade ties. Such legislation will also hamper the growth of the US economy as it will hurt huge tax revenues coming from Indian IT firms, it said.
"FICCI feels that the hike in special fee on the popular H-1B and L-1 visas for James Zadroga 9/11 Health and Compensation Act of 2010 will hamper the growth of the US economy and will be discriminatory for Indian IT companies," FICCI said in a statement. Almost all Indian IT companies would pay between USD 8,000 and USD 10,000 per H-1B visa from April 1, when the next annual H-1B visa filing session starts, thus making it quite economically unsustainable for them.
This is not only because of the USD 4,000 new fee imposed on Indian IT companies under the Consolidated Appropriations Act 2016, which was signed into law by President Barack Obama, but also due to the series of other fee that the Congress has added in the H-1B visa application over the past one decade.
Notably, the original H-1B visa application fee is USD 325. India has been in talks with the US in this regard. "Indian IT industry is of the opinion that the additional fee is unjustified similar to the earlier border security and now Health and compensation Act it has little relation with the technology industry," FICCI said. Such legislations not only impact business of the Indian IT sector but also limit access to skilled IT personnel for US companies, it added.
FICCI said increasing costs of hiring IT skilled personnel and services will influence US technology companies to consider moving IT operations overseas, thereby reducing US jobs and tax revenues. "In the longer run, it will also imbalance Americas IT services and products consumer market. In our view linking unemployment and H1-B visa issue with 9/11 Health and Compensation Act is unfair and should be dealt independently with a much broader outlook considering the overall impact on both economies," it said.
According to Indian IT body Nasscom, this is expected to have an impact of about USD 400 million annually on India's technology sector. Indian technology industry paid USD 22.5 billion in taxes during the financial years 2011-15, besides investing USD 2 billion in FY 2011-13 in the US as well as supported 4,11,000 jobs in FY2015 directly or indirectly, according to a Nasscom report.