India and US may clash over visas

By Karishma Vaswani
BBC Mumbai business correspondent

A diplomatic row is brewing between the US and India over how companies issue temporary working visas to staff.

US officials have written to nine Indian firms based in the US, asking them to account for their workforce, and explain how the visas were granted.

The US authorities are concerned that the Indian companies are trying to avoid hiring skilled American workers.

Indian commerce minister Kamal Nath has warned that the row could affect trade relations between the two countries.

Mr Nath is in Brussels on Thursday and is expected to raise the issue with the US trade representative Susan Schwab.

Job mobility

US authorities grant a total of 65,000 temporary working visas every year.

However, in recent months, the US has become concerned that many companies are bringing over lower-paid Indian workers at the expense of the more expensive Americans.

In the past few years, the US has been urging India to open up its own economy to American businesses.

Many US companies have come to India, lured by the fortunes of firms that have flourished because of the strength of the Indian economy.

Ironically, salaries in India have risen, thanks to the boom in outsourcing, but many Americans still fear they are losing their jobs to foreign workers.

Mr Nath says that he is concerned that the US authorities want to reduce the number of temporary working visas issued each year.