The Indian Ministry of Home Affairs ("MHA") issued new guidelines in late September based on an internal memorandum from the Indian Ministry of Commerce and Industry. The guidelines impose new requirements on foreign nationals submitting business visa and employment visa applications. The guidelines restrict the scope of allowable business activities for business visa holders and recommend stricter enforcement of work visa requirements for foreign nationals entering India for contractual or project work. They also modify the procedures for the adjudication and issuance of work visas to Chinese nationals, as they will be subject to an additional security clearance.
Permitted Business Activities under the Business Visa Category
The guidelines limit the scope of allowable business activities for business visa holders. According to the guidelines, it is no longer permissible to use a business visa to enter India and engage in work activities such as project or contract services. While there is no official definition of "project or contract work" in India, some key examples of such services arise when working in oil exploration, power generation, heavy engineering, and similar major projects. All project or contract services now require a work visa.
The new guidelines expressly limit the issuance of business visas to strictly business-related activities. Business activities include attending business meetings, industry conferences, or similar discussions with colleagues or clients. Also permissible under the new guidelines are activities to explore opportunities for investment, establish a business, or purchase or sell industrial products.
The guidelines state that
business visa holders already in India and performing contract or project work must leave the country by October 31, 2009. A work visa will be required to re-enter India to continue the relevant activities. In addition, no business visa extensions will be granted by Foreigner Regional officers/Foreigner Regional Registration Offices ("FRO/FRRO") for business visa holders performing activities connected to a formal project in India or related to performance of a contract. Similarly, current business visa applications pending approval by Indian consular posts will be returned if the proposed activities are contractual or involve project work.
Work Visa Requirements
The guidelines also tighten the criteria for individuals who intend to perform contract or project work to qualify for employment visas. The Indian authorities plan to limit work visa classification to workers who hold senior-level, skilled positions with the sponsoring company (e.g., managers and executives, technically skilled professionals). Applications involving administrative jobs for which a large number of Indian nationals qualify or which are low-skilled in nature typically will not be approved. The authorities also have indicated that a job market validation test is likely to be incorporated as part of the work visa clearance.
Work Visa Applications to be Filed Only at Consulates in Home Countries
Pursuant to the guidelines, Indian diplomatic posts now accept work visa applications only from citizens of the country where the post is located. Other nationals, including those with work or resident status overseas, are now required to file their work visa applications at the Indian diplomatic post in their country of citizenship. (In contrast, business visitor visa applicants may still apply at the India consulate nearest to their current place of residence.)
Processes Affecting Chinese Nationals
Chinese nationals applying for employment visas are subject to an additional security clearance. The guidelines clarify the application process for security clearances, which will determine the approval or denial of the application to the diplomatic post. The clearance process is expected to add 2-3 months to processing time. In addition, the guidelines note that the Indian government will be monitoring business visa expiration and activities for Chinese nationals. Diplomatic posts are working with the Intelligence Bureau to compile information on business visas issued to Chinese nationals since January 1, 2008, including the visa holder's name, sponsoring entity, visa validity period, and educational qualifications, among other details.
Action Items
Companies with third country and expatriate workers in or going to India need to address a number of key items in order to maintain compliance with the new guidelines. Included among these issues are:
- Evaluation of current business ("B") visa holders to determine if they are engaged in project or contractual services. If they are, planning for their departure by October 31 must be initiated immediately. If not, we recommend developing a brief compliance memorandum documenting their "scope of activity." Alternatively, companies may elect to realign the activities of B visa holders to match the requirements of the guidelines.
- Education of project and operations managers, as well as in-country HR managers. It is important to apprise these key managers of the new visa, so that, for example, activities can be limited for business visa entrants. RFP processes, current projects, and ongoing operations may be impacted if third country or expatriate entrants are now limited in their ability to engage in project or contract services.
- Development of protocol for new or extension business visa applications. The company will need to develop a protocol to support such applications and ensure the new limitations on activity are incorporated into the application and understood and adhered to by the visa beneficiary.
- Assessment of timeline and process for work visa ("E") applications. This will be particularly relevant for candidates who are already slated for such visas, as well as any October 31 business visa departees who are required for project or contract work.
We would be pleased to provide further guidance regarding compliance with the new guidelines. We also are reviewing MHA actions and consular activity, as there is some speculation that MHA may delay or reverse implementation of the new guidelines due to, among other issues, significant concerns among global commercial organizations as to the feasibility of managing projects in India as a result of the limitations on Indian visas. We shall continue to keep our clients closely apprised of these changes.