India Guidance On Its Visa Regimes May Create Major Change For Companies Doing Business In India

As reported on Littler's Global Immigration Counsel Blog on November 5, 2009, the Government of India's (GOI) Ministry of Home Affairs (MHA) released guidance on permissible use of Business Visas and Employment Visas by foreign nationals visiting India. This development has significant implications for multinational corporations (MNCs) sending employees to India on short-term assignments. This article provides an update regarding this uncertain legal development based on feedback from companies whose employees have been directly affected by this situation.

Background The GOI, in response to concerns that the BV program is being widely misused by foreign nationals visiting India, recently issued guidance and clarification on permissible use of the BV program. Specifically, the Indian Ministry of Commerce and Industry (MCI), Department of Industrial Policy and Promotion issued a letter dated August 20, 2009, outlining visa requirements for foreign nationals engaged in projects or specific contracts in India. This was quickly followed with additional clarification by the MHA on September 25, 2009, in the form of Frequently Asked Questions (FAQs). While the FAQs' somewhat relaxed the restrictive definitions outlined in the previous letter by the MCI, the GOI clearly intends to curtail improper use of the BV program and to increase use of the EV program.

Permissible Business Activities Under the BV Program The BV program was historically used by companies to transfer temporary foreign nationals to India on short-term assignments for periods of up to 180 days. Companies have used the BV program extensively to send intracompany transfers and key professionals to India on short-term business assignments. Typically, Indian Consulates around the world issued BVs with validity dates of 180 days, and even longer for nationals of certain countries or for individuals coming to the United States to establish a new business operation. It has always been relatively easy to obtain a BV at an Indian Consulate.

Based on the recent GOI guidance, however, many companies are confused as to what is now considered permissible activity under the BV program, particularly with respect to information technology-related assignments. Many of these companies have foreign nationals in India pursuant to a BV and are required to keep them in the country for short periods of time to train and supervise local personnel, execute key projects, transition work to third-party vendors, attend important business meetings and oversee the operation of an Indian affiliate. The FAQ make it clear that the BV program should not be used for employment...