THE move by the United States to cut their annual H-1B visas from 1.95 lakh to just 65,000 has rightly been viewed as a retrograde step that goes against the spirit and logic of globalisation and the globalised trade in services, a process that the US, arguably, has the greatest stake in. Two factors have prompted this knee-jerk action: the first is the psychological pressure felt by the US authorities to tighten the visa regime after the 9/11 attacks; the other is the fear prompted by rising unemployment levels that foreigners are increasingly snatching American jobs, a perception that would have some resonance in an election year.But whatever the political compulsions behind the move, it makes little economic sense given the requirements of the American software industry, especially given the drastic nature of the cutback. This will certainly impact negatively on the US economy in the long term. It will also affect India, since over a third of the H-1B quota is filled by Indian personnel. The extent of this impact is still to be assessed. It’s not all negative. India would benefit from the increased outsourcing opportunities that are bound to come its way in the wake of these restrictions. Already, there have been many changes in the pattern of the onsite/offshore dispersal of businesses and the future will very likely witness more change. What’s interesting is that Indian techies are increasingly opting to stay back and get lucrative assignments right here on home soil rather than hotfoot it to the States in search of Silicon Valley dreams in time-honoured fashion. This is not just because of visa restrictions and the shrinking job market out there, but burgeoning businesses right here. India’s software sector added an estimated 130,000 to its workforce in 2002-2003 and the job opportunities continue to keep growing.So while India’s IT companies are understandably disappointed with the US visa cutbacks there is really no reason to despair. We need, however, to take note of the changes in employment patterns and plan accordingly.
