India challenges 65,000 H-1B cap in the U.S.

The Indian government has filed a complaint with the World Trade Organization alleging that the U.S. is breaking trade rules with special fees and changes to the 65,000 H-1B cap.

The complaint raises two separate issues it says are unfair trade restrictions.

The first part of the complaint raises concerns about a special visa fee on firms that are the largest users of the H-1B visa. In December, Congress doubled H-1B fees on these firms to $4,000. The additional fee applies to firms that employ 50 or more employees in the U.S., with more than 50% of those employees on H-1B or L-1 visas.

The second part of the complaint concerns the 65,000 base H-1B visa cap. That cap has been modified under trade agreements the U.S. has with Chile and Singapore that were approved in 2004. Under the trade agreement, 1,400 H-1B visa are made available for nationals of Chile and 5,400 visas for nationals of Singapore.

In total, India is telling the WTO the measures “appear to raise the overall barriers for service suppliers from India seeking entry into the United States,” according to documents it filed.

The Indian government may have a tough case to make.

Dan Costa, the director of immigration law and policy research at the Economic Policy Institute, said the language in the U.S. trade commitments is that the U.S. will allow “up to 65,000” on an H-1B visa and not “at least” 65,000. “In other words, the plain language states that it’s a ceiling and not a floor,” he said.

Moreover, another 20,000 H-1B visas were added post trade commitments. Those visas are set aside for advanced degree graduates of U.S. schools; that alone more than makes up for any impact the Chile and Singapore visa allotment has on the base cap, said Costa. There are also cap-exempt visas for academic, research, medical and other similar uses.

The special visa fee on large users applies to any firm that meets the 50% threshold, and that includes firms in the U.S. as well as India.

It can take the WTO anywhere from a year to a decade to make a decision.

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