H-1B visa curbs will hurt Indian IT companies, says ex-Infosys US official
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Bengaluru: The former head of immigration of Infosys Ltd in the US has warned that President Donald Trump’s executive order signed last month, and various proposed legislation intended to make it harder for technology outsourcing companies to bring foreign employees on H-1B visas—will be detrimental to India’s $150-billion outsourcing sector.
Erin Green is one of the first corporate immigration executives to have spoken on the negative impact as Trump’s new administration seeks to bring in sweeping changes to the current policy that allows foreign nationals to work in America.
The US administration’s protectionist measures have made policy wonks in New Delhi worried, as last month saw finance minister Arun Jaitley raise concerns with US commerce secretary Wilbur Ross over the US move to tighten the H-1B visa regime.
“The recently proposed corporate immigration policy proposals and President Trump’s executive order all maintain a common theme that would be detrimental to the Indian IT consulting model, currently operating in the US per the H-1B and L-1 visa,” said Green, who joined Infosys in 2011, and built one of the largest in-house immigration functions in the US, before leaving the firm last year.
“My prediction is that based on the bi-partisan and executive support for the regulatory policy proposals, implemented changes will certainly strike a huge blow against the industry,” Green said in a telephonic interview last week.
Although details of Trump’s executive order are not clear for now, corporate immigration attorneys like Green, and a few executives at Indian outsourcing companies, fear that any visa curbs could result in foreign outsourcing companies like IBM (International Business Machines Corp.) and Accenture Plc winning at the expense of Indian IT outsourcing companies.
Green said that Indian IT companies “very much depend” on H-1B and L-1 visas to maintain their vital client site relationships and any changes to this engagement brought in by the proposed changes will “heavily impact the current model”.
“Some Indian executives believe the impact of these regulations would simply mean the industry will shift to more complete offshoring of the work to India. I think this line of thinking greatly underestimates the precise value and impact that in-person client facing work plays on each project. In my opinion, US clients will not be quick to want to revert to complete offshoring. They may instead want to pay more to keep these vital relationships in place, thus creating a potential vacuum enabling more expensive IT players like IBM and Accenture to “fill the void”.
None of India’s technology outsourcing companies disclose the number of H-1B visas it applies every year but analysts estimate that India corners about 70% of these visa granted every year that allows a foreign national to work in the US for up to five years.
Green said that according to industry norms, for every “H-1B/L-1 employee working on a client project in the US, there are approximately 2-4 Indian employees working on that same client project in India or in an overseas delivery centre”.
Executives at Tata Consultancy Services Ltd, Infosys Ltd and Wipro Ltd have assuaged investors’ concerns by stating that each of these companies have gradually brought down their dependence on these work visas and rather started hiring more US citizens.
Employers seeking visas for 2018 submitted 199,000 applications this year, compared to 236,000 last year, according to US Citizenship and Immigration Services.
Abidali Neemuchwala, chief executive of Wipro Ltd, told this paper last week that locals will account for as many as 50% of the company’s total workforce in the US by the end of June. Still, none of these companies have quantified the impact from either the proposed increase in salary of H-1B visa holders, or the suggested changes to the US policy of awarding visas from the current computer-run lottery system to a demand-led model.
Green also contested claims of industry body Nasscom and the largest IT companies on the minimum wages paid by Indian IT companies to its H-1 B visa holders.
Last month, Nasscom said that the average pay for H-1B visa holders was a little over $82,000, about 36% higher than the minimum wage of $60,000 set by the US government.
“A more realistic estimate of the average of Indian IT workers would be closer to the $65,000-$70,000 range,” said Green, a corporate immigration attorney with over 18 years of experience.