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Nervous Indian IT industry hopes for changes to US immigration Bill

There are many challenges that Indian IT is likely to face due to current shape of the bill.

Written by FeBureau | Bangalore | Published: June 29, 2013 12:32:09 pm

The Indian IT industry is hopeful of positive amendments to the US Immigration Reform Bill when it comes up for debate in the House of Representatives after the Senate passed the legislation on Thursday with restrictive and anti-competitive measures. Talking to FE,Nasscom President Som Mittal said,“We are not surprised with the Bill’s outcome in the US Senate. It is on expected lines and carries the restrictive clauses. The Bill now has to go through various stages in the House (of Representatives) where further amendments would be brought into the legislation. Anything discriminatory in nature will hurt US corporations as much as Indian companies.”

The only positive amendment inserted by the Senate in the Bill was increasing the cap on H-1B visas from 65,000 to 1,10,000,but this would not be very beneficial for Indian IT companies as there are other restrictive clauses. Nasscom said in a statement,“Unfortunately,the Senate bill has provisions that arbitrarily single out a group of multinational information technology companies. These proposals amount to punitive treatment of this industry.”

However,there is now the expectation that the House of Representatives would be more favourable to the industry. Nasscom pointed out,“It is unfortunate that the negative provisions continued to be there,but it’s not a surprise. We are working on the House side,where the Bill’s language is less harmful for global companies and the US customers,and are confident that we will have a more balanced Bill in the House.” According to Mittal,the Judiciary Committee of the House of Representatives has also passed a separate Bill with regard to highly skilled workers,which was well balanced. Nasscom has also partnered US-India Business Council (USIBC) to bring in the American perspective as USIBC works with a lot of American corporations. “It is important for them to understand our perspective and concerns,” added Mittal.

The key challenges being faced by Indian IT companies,notably the larger entities like TCS,Infosys,Wipro and HCL Technologies,is the outplacement clause,doubling of visa fees,stringent norms while using H-1B visas and disclosure on the use of these work permits.

The outplacement clause is perhaps the most damaging provision for Indian IT players as it stipulates that firms with over 15% of their employees on H-1B visas cannot deploy their human resource in American companies. This provision hits at the core of the Indian outsourcing business model in the US as companies generally place tech professionals on H-1B visas at client locations. The sector is also worried about other proposals,such as doubling of visa fees and the requirement for Indian firms to put up a list with the US Department of Labour on how many H-1B permits they have got and how they are being deployed.  Indian IT companies feel these clauses will only increase their administrative workload and they will get bogged down by numerous procedural issues. “The critical need for Indian IT/ITES companies is to now move up their customers’ value-chains,which,in turn,is enabled by moving a greater proportion of staff from offshore to onshore delivery modes. The US immigration Bill,in its current form passed by the Senate,will clearly impact their agility to do so,” said Sanjoy Sen,senior director,Deloitte India. The bipartisan Bill focuses largely on immigration issues while the H-1B reform is a smaller part of it,mostly relevant for Indian IT-services companies.

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