The US Congress passed legislation on Thursday to strengthen security along the border with Mexico, trying to tackle the politically sensitive issue of illegal immigrants ahead of November congressional elections.
The Indian government has protested to Washington against what it called a highly discriminatory US immigration bill that will double the cost of work visas for some high-profile Indian companies.
Funds for the bill will be raised through visa fee hikes that US Senate aides say would affect India's Tata Consultancy Services, Infosys Technologies, Wipro and Mahindra Satyam.
"Yes, this is WTO incompatible. I have no doubt about it," Trade Secretary Rahul Khullar said when asked whether the recent visa restrictions were incompatible with WTO regulations.
Indian Trade Minister Anand Sharma said that bill would cost Indian companies an extra $200 million a year and erode the competitiveness of Indian companies that send professionals to undertake projects in the United States.
However, analysts are sceptical about whether India can drag the United States to the WTO on this issue.
"We have a case against the US only if we can prove that the visa restrictions were aimed specifically against India. So we have to study the law and cannot immediately say it is not WTO compliant," said an analyst with a Delhi-based think-tank dealing with trade issues.
The Times of India indicated the change will cost Indian businesses about $200 million. This suggests India is exporting about 100,000 workers to the US every year. The new law exempts US corporations, who import workers, from the fee increase.
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