Requires a change in approach but may be worth it
Given the supposed close ties between India and the US—it was president Obama’s call to prime minister Modi that made India play ball in Paris—the latter’s stiff hike in visa fees in December came as a rude shock, more so since it looked as if India had been specifically targeted by the US. A four-time hike to take visa fees for Indian IT players to $400 million a year is a big blow in itself, what makes it worse is that Indian professionals used up roughly two-thirds of H1-B visas and around 30% of L1 visas in FY14. The reason for the hike is also difficult to defend since it is to be used for healthcare needs of 9/11 victims and to set up a biometric tracking system over a 10-year period—imagine the US reaction if India were to ask US firms to contribute to funding Swachh Bharat. And this comes on top of the US not doing much on the totalisation agreement that India has been demanding for a long time—Indian IT firms pay US authorities around $1 billion each year in social security payments for employees who do not stay on long enough in the US to be able to benefit from this. Given how weak the US case is, as this newspaper reported last week, the government will do well to—as it is planning—take the US to the WTO’s dispute settlement board (DSB) and look for a legal resolution to a problem that is not getting settled through bilateral discussion.
India’s track record in the DSB is mixed, but it seems a good idea to increase the number of cases filed. While India lost to the US in the solar equipment case as well as in the ban on US poultry and eggs, it won the case where the US imposed countervailing duties on carbon steel imports from India as well as in the case where shrimp imports from India were banned. The EU decision to impose anti-dumping duties on bed linen imports, too, was successfully fought by India. Fighting such cases isn’t going to be easy and requires a significant step up in the working of the Indian mission at the WTO and, more than anything else, means using a combination of good legal resources with strong economic/competition arguments—Indian industry, too, will have to play its role in helping collect data and helping fashion convincing arguments. In the visa case, for instance, the fact that Indian professionals seem to have been targeted more than others—assuming that is found to be true—could make for a strong argument. In the shrimp case where the US ban was based on Indian fishermen not using turtle-excluder devices, while the DSB accepted the US’ right to protect the environment, it said the US had provided countries in the Western hemisphere—mainly in the Caribbean—technical and financial assistance and longer transition periods for their fishermen to start using turtle-excluder devices. If commerce minister Nirmala Sitharaman is able to give a push to India’s legal fight at the WTO, it will make bilateral negotiations proceed that much more smoothly.