US Immigration Bill: IT Inc sees rays of hope

Written by P P Thimmaya | Debojyoti Ghosh | Debojyoti Ghosh | Bangalore | Updated: Sep 10 2013, 01:45am hrs
The $76-billion Indian IT & BPO export services industry worried about the fallout of the proposed Immigration Bill in the US has been receiving better appreciation of their concerns from lawmakers, setting the stage for a likely positive outcome of the legislation.

Talking to FE, Som Mittal, president of Nasscom, Indias IT-BPO trade body, said: We are clearly seeing that there is a more positive alignment to our views with a growing realisation in the US that what is bad for Indian IT would also be harming them.

This assumes significance as both the US Senate and House of Representatives were in recess for August, with the new session expected to start from the second week of September. It is expected that the House would take up the Immigration Bill shortly.

The Bill in its present form as passed by the US Senate in June, 2013 would inflict considerable damage on the Indian IT industry with numerous provisions, especially the outplacement clause. This clause states that firms with 15% and more H-1B dependent employees are debarred from deploying their resources at customer locations.

This is seen as one of the measures proposed to save US jobs. Indian IT companies like TCS, Infosys, Wipro, and HCL Technologies are heavily dependent on the H-1B visas to carry out operations in the US, their largest market.

Gordon Coburn, president, Cognizant, a US-headquartered IT major with large presence in India during the Citi 2013 Global Technology Conference, said, As we talk to more and more members of the Congress about this (Immigration Bill) and educate them on the issues, I think there is an increasing understanding and awareness that some of those outplacement clauses are not good for our customers.

He further said: Were seeing an increasing understanding that the outplacement clause would be bad for American competitiveness.

Indian IT companies have been crying hoarse about the various negative connotations in the Bill, which has provisions like increased visa fees, stringent conditions on placing Indian employees in American companies, besides the outplacement clause. The Bill has been passed only by the Senate, but the one which has got approval from the judiciary committee of the House of Representatives called the skilled Immigration Bill does not have any outplacement clause, which is a big positive for the Indian IT industry.

Mittal told FE that a greater number of US technology firms are now supporting their initiatives. Indian IT companies predominantly provide services on technology platforms of American companies and any shift in this balance would adversely affect everybody, he said.

Prime Minister Manmohan Singh will be holding a meeting with US President Barack Obama on September 27, when this topic is expected to come up for discussion. Wipro chairman Azim Premji has written to the Prime Minister seeking his intervention on the matter.

The commonly-held belief about Indian technology companies operating in the US has been that they were garnering a large percentage of work permits, displacing American workers. Indian firms on the other hand have always said that shortage of IT services skills in the US had created such a situation. Howard Greenberg, partner, global immigration leader, KPMG Canada, has said that the US will further open up on immigration. There is a recognition that global competition for talent is heating up and that includes Indians.