At a time when steep hike in H1B visa is becoming a key issue in trade talks between India and US, people within the US administration and local politicians are coming out in the open to talk about the negative effects of the same.

One of the biggest voices against the visa fee hike issue in the US is President Obama’s former classmate and a close friend Vinai Thummalapally, who was hand picked by Obama to setup SelectUSA in 2011 to attract foreign investments into US.

Talking to BusinessLine in Washington, Thummalapally said while India is the fourth fastest growing FDI source for US, there are hurdles faced by Indian companies looking at investments in US which need to be resolved. Speaking specifically about the H1B visa issue he said, “This is a huge issue for us. What we do is we actually communicate this to the White House and this is a big concern for the Indian companies. Of the top 18 companies in IT services about 15-16 are Indian companies including Wipro, Tatas and Infosys. They have been impacted by the rule.”

He said US affiliates of Indian-owned companies employed 45,100 employees in US in 2013 and contributed $1.5 billion to US goods exports in the same year and fears of job losses by bringing in foreign workers is unfounded.

Thummalapally added that India-US trade has the potential to grow from $117 billion to $500 billion in next 10 years but protectionist moves such as doubling the work visa fee.

In March, India initiated a WTO dispute proceeding against the United States regarding measures imposing increased fees on certain applicants for H1B and L1/L2 visas--two categories of non-immigrant temporary working visas into the US, and measures relating to numerical commitments for some visas. According to India, the measures appear to be inconsistent with US commitments under the General Agreement on Trade in Services.

Voices against H1B visa restrictions can be heard even from members of opposition Republican party, who feel blocking highly skilled Indians from working in US could not only impact trade relations between the two countries but also impact the US economy, which is in dire need for skilled workforce.

“We have so many Indian students that come here and go to our universities and what kills me is the fact that they are trained, they are talented and then they get sent back. There’s a lot of talent in India and that talent when they come here and they get educated here, it's the first talent we want to see be able to join our forces and work for our companies,” said Nikki Haley, governor of South Carolina and a prominent Republican Party leader.

The bigger loser in the trade battle between the two countries appears to be US, which is already seeing decline in foreign investment. FDI flow into US more than halved to $106.6 billion in 2014 from $211.5 billion in 2013. Thus India is now being seen as a huge untapped source for FDI by US.

“There is a huge dichotomy in US' trade policies, which is increasingly becoming protectionist while trying to attract more investment. This has led to US share of global FDI falling from 45 percent in 1984 to 12 percent in 2012. India is a huge untapped market for US and H1B visa issue has had a huge negative impact of trade,” said Marek Gootman, director, strategic partnerships & global initiatives at Washington DC based think tank Brookings Institute.

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