The US immigration has been under intense scrutiny not only in the US but also in India and other countries across the world. This scrutiny is attributed to certain clauses in the bill which will affect the bottom line of the outsourcing industry. Most of the clauses pertain to the US H-1B visa which is a non-immigrant visa that allows foreign workers to be employed by American companies providing that the employees have theoretical or technical expertise in the concerned field.
The fees associated with filing for new visas will also depend on the number of foreign employees in the company. The Indian IT industry has been rallying against this particular clause as a significantly large portion of their workforce is Indian.
Furthermore, there is a cap on the number of immigrant employees that a company can have. This means that the outsourcing companies with locations in the US will have to hire more American staff at higher salaries than the Indian employees. The base profits then will face a substantial hit.
Apart from their own lobbying efforts, numerous Indian IT companies are now banking on their clients to support their efforts against certain key clauses in the immigration bill. These clauses as detailed earlier are perceived to be detrimental to the IT industry in India.
Sudin Apte, CEO at Offshore Insights, an advisory firm noticed that numerous large corporations with technology sourcing arrangements with other software firms are leveraging their positions and are making their views on the bill heard by the right people.
Role of Nasscom
Ameet Nivsarkar, Vice-President of Nasscom was believed to have said that Nasscom has pushed for member companies to reach out to advisory groups, think-tanks, clients and other stakeholders to voice their opinions. Nasscom is an industry body that represents the Indian IT industry valued to be worth nearly $108 billion.
Ameet Nivsarkar was quoted as saying, “It’s difficult to expect all clients to throw their weight behind us, but clients know the value that IT companies bring to the table. The Bill, in its current form, will impact US competitiveness.”
Outsourcing companies in India like Wipro, Infosys and Tata Consultancy Services amidst numerous other such companies will find that the draft of the US immigration bill will limit the number of Indian origin employees in their US office locations. Every new visa will cost $5000 for companies with a workforce of more than 30-50% of foreign employees on visas. The current draft has strong support from more than eight US senators.
A higher fee
If a company, irrespective of the country of origin, has a workforce composed of more than 75% employees on work visas, the company cannot apply for any new work visas for new employees. If the current draft clears the Congress and President Obama signs the legislation, it will become the law of the land. The base fee for foreign work visas will also be higher than its current equivalent.
Cognizant’s Take on US Immigration Bill
Cognizant Technology Solutions in a recent conference call with concerned analysts was supposed to have been looking for an opportune moment to add their weight to the reigning opinion of dissent with the visa clause in the immigration draft.
Gordon Coburn, the President of Cognizant Technology Solutions was quoted as saying, “Our clients have very sophisticated lobbying organizations. They will lobby as they need these people to remain competitive in the global environment. And if the Bill is passes as it is, it would hurt every bank, every insurance company and every drug company in the country. I don’t think anyone in the Senate or House wants that to happen.”
The US Government Accountability Office Report
The US Government Accountability Office or GAO in a 2011 report said that the top approved H-1B visa employees came from China, Canada, the Philippines and India. With statistics and reports supporting the presence of the foreign employees and their role in leveraging US’ competitiveness, it is unlikely that clauses detrimental to the IT industry will appear in the law. Speculation however is all there is to bank on at the moment.