US immigration reforms to hit Indian IT companies

Published: 18th April 2013 08:06 AM  |   Last Updated: 18th April 2013 08:06 AM   |  A+A-

India is worried at the negative impact of a propo­sed US immigration bill—which seeks to boost more local hires in the IT industry—on pro­fit margins of Indian companies.

On Tuesday in Washington, a group of eight US senators unveiled the draft of a comprehensive immigration bill, which aims to bring about broad-based changes in the immigration system with a focus on attracting highly-skilled workers.

While the draft legislation proposes to increase the number of H-1B visas to 1,10,000, it also puts a cap on visas issued to each company based on the proportion of local employees on its workforce.

Just two days ago, Indian ambassador to the US Nirupama Rao, in an article published in the USA Today, had defended Indian IT companies against criticism that they explo­ited the H-1B visa process to get cheaper workforce from India.

She asserted that bringing Indian workers to the US “provided the continuity and institutional knowledge required to serve commercial and governmental clients well”. The Indian envoy had noted that the Indian IT industry employees over 50,000 US citizens and supports an additional 280,000 local US hires, as well as aiding many US-based firms in developing new products. “This, in turn, helps them both preserve and create jobs here in the US,” she said.

There will be an incremental cap on the number of foreign workers allowed on H-1B visas to just 50 per cent of a company’s manpower by 2016.

Indian IT firms’ staff account for more than a third of H-1B visas issued in a year, and are therefore expected to be widely affected if the US government adopts the draft unveiled by the bipartisan senatorial group.

The issues raised by Rao do not seem to have been addressed in the draft, with the US India Business Council asserting that certain provisions will hurt Indian companies. 


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