India’s flagship outsourcing IT industry is still unhappy about a steep rises in US work visas fees, some of which will almost double.
They are furious that they are effectively paying for tighter security on the Mexican border as the US administration spends more money there.
‘The US is giving a very strong signal foreigners are not welcome. I believe this is discrimination,’ said Som Mittal, president of the National Association of Software and Services Companies (NASSCOM), which represents India’s leading software exporters.
The row comes ahead of a visit by President Barack Obama later this year and is a result of the extra money from visa fees being used to pay for the US government’s plans to boost security along its border with Mexico to crack down on illegal immigration and drug smuggling.
‘While the need to secure greater funding for strengthened security along the US-Mexico border is well understandable, illegal immigration issues are not linked to the temporary movement of skilled professionals,’ said Chandrajit Banerjee, head of leading business body the Confederation of Indian Industry.
He believes it flies in the face of a strategic partnership launched in April to promote economic ties and described the decision to increase fees as ‘a protectionist pushback’ that does not help the partnership.
The US legislation affects those skilled workers brought in by companies whose employees are more than 50% foreign, a move that largely affects India’s IT and outsourcing industries.
US high tech firms such as Microsoft, which bring skilled immigrants into the country on the same visas will not be hit as the vast majority of their workforce is American.
NASSCOM says the measures will boost annual US visa costs for the outsourcing industry by $200 to $250 million annually.
More than half of the world’s top 500 companies outsource work to India which has become the world’s back office where Western firms have set up call centres and number-crunching and software development outlets to cut costs. But the $50 billion revenue industry also flies employees each year to the US to work at their clients’ locations as on site technicians and engineers.
Under the law, the fees for non-immigrant H1B and L visas go up by $2,000 for firms with more than a 50% non-American workforce. The current fee is $2,500. Critics also claim that it will make the Indian IT industry less competitive in the global market.
‘This will have a negative impact on Indian companies that are investing in the US, employing US talent and are overall aiding the US economic recovery,’ added Nasscom vice president Ameet Nivsarker. The organisation reckons that Indian companies, with the large majority IT companies, apply for 50,000 visas every year to bring in skilled workers through the H-1B and L-1 streams, besides renewal of old visas.