Mumbai/New Delhi/Pune: With 11 months to go for the US presidential election, the political race is not the only thing heating up. Indian IT service companies, too, are facing the heat with US politicians introducing a second bill in as many months to curb the use of H-1B visas.
Abill filed by US senators Bill Nelson (Democrat) and Jeff Sessions (Republican) aims to cut the number of H-1B visas by 15,000 from the current 85,000 a year, according to a media release dated December 8 on Nelson’s website. The bill proposes that visas be granted to the highest wage earners first.
Nelson said the proposed measure will help ensure that the H-1B visa programme will be used as it was originally intended: to attract foreign workers with highly specialised skills not found among the available US workforce.
A month ago, senators Chuck Grassley and Dick Durbin introduced a bill aimed at stopping companies from hiring H-1B visa holders if they employ more than 50 people and over 50% of their staff are H-1B and L-1 visa holders.
“Very clearly, we see that there is a move to protectionism which is coming out of the US. Whether it works out or not is a different issue altogether,” Shivendra Singh, vice president at the National Association of Software and Service Companies, told ET.”But it does lead to creating a fair amount of news across and among various stakeholders, which is also to the detriment of our companies.”
Nasscom has responded by increasing its lobbying efforts in the US and releasing studies highlighting Indian IT’s contribution to the US economy. A study released in September contended that Indian IT companies paid $22.5 billion in taxes to the US Treasury between 2011 and 2013 and supported more than 411,000 direct and indirect jobs in the US – including 300,000 jobs for US citizens and permanent residents.
About 70% of the H-1B visas in 2014 went to workers from India, according to a report in The New York Times on November 10 that cited figures from the US Department of Homeland Security. Indian industry insiders see brazen politics behind such legislation.
Nelson, who introduced the latest bill, comes from Florida where entertainment giant Disney has its headquarters. Earlier this year, Disney faced a backlash after it laid off 250 US employees to outsource their jobs. “He has to do something or show that he has done something.
This latest bill is part of that,” said an industry executive who did not want to be identified. However, the fact that the latest bills are sponsored by both Republican and Democratic senators in a country where such bi-partisanship is increasingly hard to find means that Indian IT companies may have to take them very seriously.
“There is no immediate threat of this bill going through and it’s not going to happen during an election year. However, it’s a clear trend that the industry needs to wake up to. The (US) economy is growing slowly and there’s a mood of protectionism. It’s like the boy who cried wolf – we’ve heard this so many times, but this time I think we need to take it more seriously,” said Ganesh Natarajan, CEO of Zensar Technologies.
Tata Consultancy Services and Infosys declined to comment. Wipro, HCL Technologies and Tech Mahindra did not respond to a request seeking comment. Industry experts believe visa troubles will force Indian companies to tweak their business model.
“This will drive Indian IT companies to deliver more of the junior level work offshore from India while marketing and managing client relationships from overseas locations. This is a trend that has already started,” said Sanjoy Sen, a doctoral research scholar at Aston Business School, UK, and former director at Deloitte India’s IT practice.
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