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USIBC urges US to remove immigration barriers for Indian IT firms

Provisions in proposed visa reforms would be extremely harmful to Indian IT firms, say former envoys
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First Published: Fri, Sep 13 2013. 12 45 PM IST
The Immigration Bill, which is expected to be passed into law in early 2014, will double visa-application related costs for top Indian software services firms. Photo: Mint
The Immigration Bill, which is expected to be passed into law in early 2014, will double visa-application related costs for top Indian software services firms. Photo: Mint
Bangalore: The US-India Business Council (USIBC), along with five former US ambassadors to India, has urged senators in the US to remove provisions in the immigration Bill that could hurt Indian information technology (IT) firms.
In a letter addressed to senators and members of the US House of Representatives, including speaker John Boehner and majority leader Harry Reid, the five former US ambassadors said the provisions in the proposed visa reform would be extremely harmful to Indian IT firms operating in North America—their biggest market—and “risks provoking ‘tit for tat’ retaliation, which denigrates this important relationship” between the US and India.
The USIBC is a business advocacy organization, comprising top-tier US and Indian companies, that aims to strengthen two-way trade and commercial ties between the two countries.
“While we believe that the US Congressional efforts to further Comprehensive Immigration Reform can be of great benefit, we are concerned that the high-skilled visa provisions in legislation currently contemplated by the Senate are not in US economic interests and they complicate our relations with India,” the five former ambassadors wrote in the letter.
The Immigration Bill, which is expected to be passed into law in early 2014, will double visa application-related costs for top Indian software services firms such as Tata Consultancy Services Ltd, Infosys Ltd and US-based Cognizant Technology Solutions Corp., which has most of its 162,700 employees in India.
Moreover, the Bill, if passed in its current form, will force Indian software exporters to remove professionals on H1B work permits from client locations in the US and force companies to file fewer visa petitions effective October 2014, as the cost per petition would go up by about $5,000.
Such a move would cause significant disruption to the business models of top Indian IT firms, which get more than half their overall revenue from North America.
Last month, Wipro Ltd’s billionaire chairman Azim Premji wrote a letter to Prime Minister Manmohan Singh asking him to seek US President Barack Obama’s administration’s intervention to remove provisions in the Bill that would discriminate against Indian IT firms.
The visa reform, which has already been approved by the US Senate, is currently being reviewed and is awaiting approval by the House of Representatives.
“In particular, the bill will block Indian IT companies (as well as significant US IT service providers) from providing these essential services—and free-market competition—to our leading US-based multinational companies,” the letter said. “Equally important, such legislation sends a protectionist signal to our Indian counterparts—a signal normally reserved for nations with whom we have non-productive relations. India does not fit this category.”
According to the letter, two-way trade between the US and India currently stands at over $100 billion a year, compared to $25 billion in 2006.
In July, a JPMorgan India report pointed out that the Bill would ironically discriminate against Indian IT firms that had in fact created more jobs in the US over the past decade than their multinational counterparts such as International Business Machines Corp. (IBM) and Accenture Plc.
“Our ongoing bilateral dialogue with India and not punitive legislation has in the past helped resolve differences. Departing from this approach will not solve these problems,” the letter said. “We would appreciate your bringing our concerns to the attention of those who are responsible for the preparation of final comprehensive immigration legislation and ask that they revise those sections and remove those features of any Bill that would limit market entry of IT professionals who work for so-called Visa-dependent IT companies.”
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First Published: Fri, Sep 13 2013. 12 45 PM IST
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