Soms ride with Uncle Sam may get choppier

Written by Darlington Jose Hector | Updated: Nov 12 2012, 06:38am hrs
With Barack Obama getting re-elected as US President, Nasscom president Som Mittals engagement with Uncle Sams protectionist stand has received an extension. Obama gave Som plenty of grief in his first tenure, but the former HP-man has never wanted the world to see the bruises.

Over the last one year, the number of visa rejections for business travellers to the US had risen dramatically and Indian technology professionals have had the rough end of the stick in this regard. While earlier visa rejections stood well under 10%, these days that number is inching towards the 40% mark. Clearly, Indian IT vendors have been hard-hit on this front. Neither have they been able to support their customers adequately on-site, nor have they been able to put a cap on this additional expense.

While Nasscom has been trying its best to deal with the situation, it has not been easy, as evident from the continuing issues on the visa front. This was especially true in the run-up to the Presidential elections. Indian software companies have probably not worked out ways to surmount the reasons behind the restrictions placed on H1-B and L1 visas.

The issue had kicked into a higher gear, when Infosys was accused of visa abuse by the US Department of Homeland Security. That was a tough time for Som & Co. Infosys made it very clear that there was no such abuse and eventually proved that without doubt. Yet, that was a blot that took some time to wipe away.

Som has been vocal about the issues emanating from the interpretation of visas, but the problem is there does not seem to be one clear way of judging the rules. Nasscom has been trying to hammer this out with US consulates, but it may take some more time before there is more clarity on this.

Nasscom is upset that visa rejections have not come down, despite the fact that Indian IT firms have continued to create more and more job opportunities in the US. In the last five years, the number of people who have received employment from Indian IT firms in the US, has roughly doubled. The firms have also tried to increase their campus recruitment drive in America, in order to tide over the anti-outsourcing wave. Companies like Infosys and TCS have made more investments into their US centres. In fact, they are investing more than ever before.

Yet the US government had decided to raise visa fees steeply, during Obamas first tenure. This had a huge impact on the profit margins of Indian IT firms. But Som has tried to play it cool. Nasscom has said, quite rightly, that opposition to outsourcing in the US was targetted essentially at the manufacturing sector and not necessarily software services. Many of the jobs in the US manufacturing sector have moved to China. The fact is that America continues to face an IT skills shortage, something that India is quite capable of addressing. We are the solution to many of the problems that US faces. There is a realisation (in the US) that we are part of the solution, he said recently. Nasscom shares many of the same economic and diplomatic goals outlined by President Obama and specifically, we agree on the shortage of STEM professionals in the US and support expanding the visa programme so that highly skilled workers can help companies lead the way on innovation and contribute additional jobs and economic growth in the United States, the IT trade body said in a recent statement.

Som is good with not taking a position of confrontation. He has been able to talk the language that the Americans like. In Obamas second term, the President will not have to worry about the consequences of his policies from an election point of view. There is no third term for the President in America. Hence, he is in a better position to give wings to his thoughts. What Nasscom will have to do is to walk on his right side. Thus far the Obama administration has not been able to choke Indias IT fortunes. The good part is even if they want to, American companies have no choice but to outsource to a country like India, where the quality of software services has married cost-effectiveness in perfect harmony.