The U.S. Congress passed legislation 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 U.S. 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 U.S. 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 analyst did not wish to be identified.
Khullar also said that the export outlook for India remains uncertain for the next six months but there is no need to change the 2011 export target as of now.
India's July exports were up more than 13 percent, Khullar said. He also told reporters that as of now India's current account deficit is manageable. (Reuters)
