21 September 2010

US Visa application fee increase will sour ties with India say experts

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The US Visa application fee increase will damage American competitiveness, two leading economists have said.

Jacob F. Kirkegaard and Arvind Subramanian, senior fellows at the Peterson Institute for International Economics, argue that the law to increase certain US Visa application fees to raise $600 million to help secure the US-Mexico border will have negative consequences economically.

“It is unlikely to raise revenue, will inflict damage to American competitiveness, sour US relations with India, and above all send the wrong signals about US attitudes to open global markets," Kirkegaard and Subramanian wrote in Foreign Policy magazine.

“Without explicitly saying so, the law clearly targets India, home of the world's fastest growing IT services companies," the experts wrote.
Indians received about half of all H-1B and L-1 visas in 2009, and comprise most of the roughly 50 percent of all H-1B and L-1 recipients who work in computer-related occupations in the US.

Kirkegaard and Subramanian argue that if India were to shift its economic orientation away from the US the cost would far outweigh any of the political benefits or fiscal revenue from this US Visa fee policy.

The new law calls for fees for the H-1B and L-1 immigrant visas to increase by $2,000 and $2,250 respectively for companies with 50 or more employees in the US  if more than half of the company's employees are on H-1B or L-1 visas.

This provision effectively doubles the existing total government fees for the affected companies, which are predominantly Indian IT services firms.

The American Visa Bureau is an independent consulting company specialising in helping people with their US Visa and immigration applications to the American Embassy.

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