Why is it so hard for Indians to get a visa?
Summary
- Outsourcing firms are capitalising on Indians’ misery
Applying for a visa to Europe’s border-free Schengen zone can be a humbling experience. “One must set aside ego," says an applicant from Bangalore. “I feel stripped bare each time I apply," says another from Mumbai. The bureaucratic grind can wear down even the most seasoned traveller. Tourists and businesspeople wanting to visit Europe must provide heaps of paperwork—forms, months of bank statements, pay slips and tax returns. After all that, successful applicants are typically granted visas that cover only the length of their trip. For those needing to return, the whole ordeal begins anew.
Citizens of rich countries do not need a visa for short stays in most parts of the world. But those from the developing world often do. Indians are among the worst off (see chart). For them, the high fees, long waits and application hurdles of the visa process make travel, whether for business or leisure, much tougher.
A handful of private firms are cashing in. Outsourcing companies now handle 40% of visa applications on behalf of governments. Although consulates still make the final decision, these contractors verify paperwork, collect fingerprints and gather other biometric data from applicants. Three firms—VFS Global, TLScontact and BLS International—control over 70% of the market, with VFS alone holding half the overall share. An early entrant, VFS processed 6m applications for 25 governments in 2008. By last year, that number was 26m applications for 67 governments. In October, Singapore’s state-owned investor Temasek acquired a stake in the company, valuing it at $7bn.
As disposable incomes rise in developing countries, and as travel rebounds after the pandemic, the market is primed for further growth. Nuvama Group, an investment firm, predicts the visa-outsourcing industry will expand by more than 9% annually, crossing $5bn by 2030. For governments, visas are a nice little earner. In 2023 the European Union pulled in over $900m from visa fees.
For travellers, however, the process has only become harder. Between 2013 and 2023, the rejection rates of visa applications for the Schengen area more than tripled from around 5% to 16%. Visiting America is no easier. Appointments for tourist and business visas at the American consulate in Mumbai take about 14 months. In Bangkok it takes six months.
There is also the price tag. A study by the European University Institute found that citizens from poorer countries pay far more for visas than those from wealthier ones, and when the fees are measured against national incomes, the gulf between rich and poor countries is even wider. The standard fee for a short-term Schengen visa is $95, a British visa $151 and an American one $185. For frequent travellers to the Schengen area, which grants visas for very short durations, the costs add up.
Adding to the burden is the service fee travellers pay to the outsourcing firms handling their application. For example, Indians pay an additional $23 for a Schengen visa. Then come the optional add-ons to make the experience more comfortable (or just bearable): for $40, applicants can relax in a special lounge with personalised service; for $30, paperwork can be submitted outside regular hours; for $200, it can be done from home. These extras are highly profitable. BLS International, which is based in India, generated nearly a third of its revenue from such “value-added" services, with a robust 20% profit margin.
Governments defend outsourcing by arguing that consulates still make the final decisions on visas; private contractors simply reduce the administrative load. Federica Infantino, a researcher who studies migration at Université Côte d’Azur, believes there is another benefit. Visas are often a “touchy" issue, she says, and when dealing with visa denials having an intermediary can be useful for governments.
Restrictive border policies do not just complicate travel; they are economically damaging. Tourists from countries such as India and China are among the biggest spenders, according to UN Tourism, a multilateral agency. Research by Camilo Umana-Dajud of CEPII, a French think-tank, shows that visa restrictions significantly reduce bilateral trade. Easing access has the opposite effect.
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