US accuses India of unfair and discriminatory practices, restricts Vande Bharat charter flights

The US has also extended the 60 day ban on H-1B and H-2B visas, serving a blow to Indian IT companies

Vande Bharat charter flights

The United States government on Monday, June 22, restricted charter flights from India, part of the Vande Bharat mission, alleging India had engaged in “unfair and discriminatory practices” by violating a treaty governing aviation between the two countries, The Indian Express reported.

The US Transportation Department alleged that Air India Ltd has been making flights to repatriate those citizens who were stuck in the US due to the travel restrictions brought about by the Covid-19 pandemic and selling tickets to the public. The department said this created a “competitive disadvantage for US carriers” as US airlines have been prohibited from flying to India amid the pandemic.

The Vande Bharat mission began on May 6, 2020 to help people stranded in foreign countries to return home during the pandemic. The Indo-US route has been in operation since May 18, 2020.

The press statement by the US Department of Transportation (US-DOT) read, “In response to the COVID-19 public health emergency, the Government of India (GoI) has completely banned all scheduled services, and has also failed to approve U.S. carriers for charter operations.  At the same time, Air India is operating what it calls “repatriation” charter flights between India and the United States in both directions from May 7, 2020.  Air India is advertising flights that would constitute a rate of 53% of the scheduled services it operated before the onset of the current public health emergency.  Considering this rate of flying, and that Air India is selling tickets on the market, the charters go beyond true repatriations, and it appears that Air India may be using repatriation charters as a way of circumventing the GoI-imposed prohibition of scheduled services.”

“…Effective 30 days from the service date of this Order, it shall not perform any Third- and/or Fourth-Freedom charter flights unless the Department has granted it specific authority in the form of a statement of authorisation to conduct such charters,” it added.

The third freedom of the air is the right or privilege, in respect of scheduled international air services, granted by one State to another State to put down, in the territory of the first State, traffic coming from the home State of the carrier.

The fourth freedom of the air is the right or privilege, in respect of scheduled international air services, granted by one State to another State to take on, in the territory of the first State, traffic destined for the home State of the carrier.

Why the restrictions?

The statement by US-DOT said, “On May 26, 2020, Delta Air Lines, Inc. (“Delta”), via letter, requested permission from the Indian Ministry of Civil Aviation (MoCA) to perform repatriation charter services similar to those provided by Air India. To date, Delta has not received approval to perform the requested repatriation charters.”

It also mentioned that the US Government had first registered its objections with the Government of India (GoI) through engagement by the US Embassy in New Delhi on May 28, 2020. However, the GoI had thus far failed to remedy the situation, it said.

Hence, to create a level playing field for US airlines, the US-DOT has ordered that Indian air carriers will now have to apply to the department for statements of authorization prior to conducting charter flights. The order will allow it to scrutinize charter flights by Indian carriers on a case-to-case basis. It also said that the restrictions will be reconsidered once India lifts restrictions on US carriers.

On June 23, the Directorate General of Civil Aviation said that it received requests from concerned authorities in several countries including US, France, Germany among others requesting that their air carriers be allowed to participate in transportation of passengers along the line being conducted by Air India under Vande Bharat Mission. In the wake of this, it was now looking at the possibility of bilateral arrangements. It said, “As we contemplate further opening up in response to demands, we are looking at the prospect of establishing individual bilateral bubbles, India-US, India-France, India-Germany, India-UK. These are all destinations where demand for travel has not diminished. Final decisions pursuant to negotiations are expected to be taken soon.”



Apart from this, in another blow to most IT companies in India, the Trump administration extended the 60-day ban on immigration and non-immigrant worker visas till the end of 2020 and said that some work visas including the much coveted H-1B and H-2B visas will remain suspended. Certain categories of H-4, J, and L visas will also remain suspended till the end of the year, an official release stated, The Indian Express reported. The move by US President Donald Trump comes as a bid to protect unemployed Americans from the threat of competition for scarce jobs due to the compromised economic situation currently prevalent.

This ban will not apply to any lawful permanent resident of the US and any immigrant who is the spouse or child of a US citizen. Some relief has also been provided to workers providing temporary labour or essential services to the US food supply chain. Their entry will be determined by the discretion of the consular officer.  

The H-1B visa is the most popular among Indian IT companies and the US government has a cap of 85,000 total H-1B visas to fill the highly-skilled low-cost employee disparity in the IT domain. Of this, 65,000 H-1B visas are issued to highly skilled foreign workers, while the rest 20,000 can be additionally allotted to highly skilled foreign workers who have a higher education or master’s degree from an American university, Indian Express reported. Typically, the initial duration of an h-1B visa classification is three years, which may be extended to a maximum of six years.

Before the employer files a petition with the US Citizenship and Immigration Services (USCIS), it must take steps to ensure that the hiring of foreign workers will not harm US workers.

The L1 visas, for the managerial and executive level and for specialized employees, are issued for upto seven years while the H-2B visas, for non-agricultural workers coming temporarily to perform services of a temporary nature, are issued for a maximum of two years.

Fortune reported that according to the USCIS data of 2019, Tata Consultancy Services had filed roughly 10,000 H-1B visa applications. Amazon had submitted around 7,500 visa applications while Google and Apple had submitted over 6,500 and 4,500 respectively. India made up for 278,491 H-1B visa holders (roughly 72% of 388,403 visa holders) and it also became the most common country of citizenship for L1 workers with 18,354 visas issued in 2019.

As the H-1B visa issuance will not be decided by the prevalent lottery system, the new norms will favour highly skilled workers who are paid the highest wages by their respective companies. This could impact companies which send thousands of low-cost employees to work on client sites in the US.

However, another view is that the ban and new norms will lead to more services in India as outsourcing of work may increase as there will be an increased shortage of skilled workers in the US, India Today reported. Sources told the publication that out of the approximately 60,000 visas that go to India each year and with the ban only for 6 months, around 30,000 visas would be impacted at best. The same would also mean that India could use the knowledge of these highly-skilled workers as demands in the science and technology sectors increase in the coming time.


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