1. As India, US debate H-1B visa merits and abuses, IT firms fear rising costs, staff layoffs

As India, US debate H-1B visa merits and abuses, IT firms fear rising costs, staff layoffs

With the stakes running high for the information technology sector, amid the ongoing developments on the H-1B visa issue, both sides have elevated the pitch on value created by Indian workers in the US, and abuse of the system by Indian companies.

By: | Updated: April 26, 2017 2:05 PM
Amid the growing clamour on pros and cons of protectionism, Indian stakeholders ranging from the top government functionaries to private citizens are actively raising voices against the United States’ action to kerb H-1B visa allotments to the information technology professionals from the Asian nation.

With the stakes running high over job creation and protection in the information technology sector serving corporations amid the ongoing developments on the H-1B visa issue, both sides have elevated the pitch on value created by Indian workers in the US, and abuse of the system by Indian companies to send more employees abroad.

Amid the growing clamour on pros and cons of protectionism, Indian stakeholders ranging from the top government functionaries to private citizens are actively raising voices against the United States’ action to kerb H-1B visa allotments to the information technology professionals from the Asian nation.

Prominent government leaders, including Finance Minister Arun Jaitley and Commerce & Industry Minister Nirmala Sitharaman, have taken up the issue at the highest levels with their US counterparts, in frantic efforts to save Indian IT companies from a potential surge in costs, and IT professionals from possibly losing their jobs.

On the other hand, while the US is contemplating a drastic change in the visa allotment rules, there is a call from some quarters for an even further meaningful reform of the H-1B visa regime to prevent the companies from abusing the program.

India’s Chief Economic Advisor, Arvind Subramaniam, has said that any serious action by the US on the H1-B visa issue will be a cause of concern for Indian Services Industry. “If there are serious actions taken it’s something that’s going to kind of worry us a lot because remember that our exports of services are about 40 to 45 percent of the total exports,” Subramanian said last week during an event in the US. “Something like 50 to 60 percent of all our exports of services goes to the United States. So it would worry us quite a bit,” he further added while responding to a question on the H1-B visa issue. “Anything that is going to interfere with export growth creates anxiety (in India). In the context of the United States, we’re all watching very carefully the H-1B visa situation,” he added.

Urjit Patel, RBI Governor, has also warned against the increasing talk of protectionism saying that giant multinationals corporations have benefited from an open trading system built on global supply chains. “Where would Apple be, where would Cisco be, where would IBM be if they were not sourcing the best products and talent from across the world. And if policies come in the way of that, then the big wealth creators in a country that advocates protectionism are ultimately affected,” he said.

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Last week, India’s Finance minister, Arun Jaitley, had also taken up the Visa issue with the US Treasury Secretary, Steven Mnuchin. Earlier, he had also raised the issue with US Commerce Secretary Wilbur Ross earlier. He discussed the issue of H-1B visas for skilled professionals from India and highlighted the contribution of Indian companies and professionals to the US economy, according to a finance ministry statement.

India’s Commerce minister, Nirmala Sitharaman, had also said that it is not the case that just Indian companies are in the US, several big US companies are in India too. She further said that the nations, which are creating hindrances in the free movement of professionals, had provided a commitment to the WTO on the number of work Visas they will issue and India can question them if they don’t live up to their commitments. However, she added that although India isn’t questioning the Sovereign right of a country to issue Visa, still the issue of Visa process review is being discussed with the US and will wait for the Visa review process to end before commenting further on the issue.

Earlier the US, in a White House briefing, had accused India’s leading IT firms like TCS and Infosys, for unfairly garnering a large share of H-1B visas by putting extra tickets in the lottery system and flooding the system with applicants, upping their chances of success in the lottery draw. This US charge has been refuted by NASSCOM, stating that only 6 of the top 20 H-1B Recipients were Indian companies and that TCS and Infosys together received only 7,504 approved H-1B Visas in FY15.

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