WSJ: “A draft U.S. immigration law, likely to be unveiled this week, holds good and bad news for Indian IT companies.
Indian outsourcing firms like Infosys 500209.BY -1.71% Tata Consulting Services 532540.BY +0.64% and Wipro have large offices in the U.S. that service American clients. To keep costs down, these firms send thousands of Indian workers to such centers on skilled worker, or H-1B, visas.
Indian firms have long argued a cap on these visas is unfair. This year the cap of 65,000 H-1B visas already has been reached, meaning Indian companies will need to hire more-expensive short-term workers locally in the U.S., depressing their margins.
The draft U.S. immigration law, described to the Wall Street Journal by Senate aides, aims to drastically overhaul the nation’s immigrations procedures. It seeks to create a pathway to citizenship for some 11 million people living in the U.S. illegally.
For Indian firms, the bill’s interest lies in changes it proposes for the H-1B program. The legislation seeks to increase the cap on these visas to 110,000, with the ability to go as high as 180,000 depending on economic conditions and demand. An additional 25,000 visas would be available for people who have earned advanced degrees in the U.S.
But that’s where the good news ends, says the National Association of Software and Services Companies, or Nasscom, the Indian IT industry trade body. It is worried by other proposals in the bill that will demand employers who want to tap the high-skilled-visa program to “pay significantly higher wages for H-1B workers than under current law.”
The bill also would require those employers to advertise open jobs for 30 days on a U.S. Department of Labor website before they could bring in foreign workers. Employers who rely heavily on non-U.S. workers would be forced to pay higher fees.
The idea here is to soften criticism in the U.S. that the visa program is being used to give jobs to Indian and other foreign workers that U.S. employees could do at a time of relatively high unemployment.
“The comprehensive immigration reform was necessary in the U.S. It’s good that it’s happening,” says Ameet Nivsarkar, vice president of Nasscom. But he said the association was worried the higher wage provision could be used to keep out Indian companies, by far the biggest users of H-1B visas.
“Our single biggest worry is that these rules may be applied in a discriminatory manner, only on a certain section of companies,” Mr. Nivsarkar said.
Nasscom is lobbying for a fairer visa policy in the U.S., he said. “That’s our job. We are working through our partners in the U.S. and with the government in India.”
More than 80% of the operating costs of Indian technology companies come from wages. Salaries to employees at overseas locations account for half of total wage costs. Any increase in overseas salaries may squeeze the profitability of the companies, analysts say.
“Any crimp on the movement of human capital will hurt trade between India and the U.S. and will eventually impact both Indian and non-Indian services companies, as well as their U.S. clients,” says Siddharth Pai, president of the Asia-Pacific business of U.S.-based technology advisory services firm Information Services Group.
By raising the overall costs for skilled-worker visas, the U.S. is raising barriers to trade with India, he added.”
via U.S. Visa Law Holds Good and Bad For India – India Real Time – WSJ.
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