IT sector pins hopes on PM to raise visa issue in the US

by CXOtoday News Desk    Sep 27, 2013

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As Prime Minister Manmohan Singh is set to raise some of the key issues concerning India with US President Barack Obama, the IT sector is hopeful and believes that the PM should take up the case for a simpler visa regime as well which is plaguing the industry for a long time.

The probable US law which makes work visas costlier and difficult to obtain has been time and again criticized by the IT industry. experts believe only if Singh raises the issue with the American president, it will manifest the country’s concern for one of the key sectors that warrants more than $76 billion in export revenue, 60% of which from the US.

The bill also demands that these companies bring down their visa-dependent workforce to 50% by 2017, a move that will result in higher costs for Indian software firms as they will be forced to hire local employees in the US. 

“We have been talking to US lawmakers and multiple viewpoints suggest that restrictive clauses in the bill must be removed. I hope the Prime Minister would tell them that we have done our bit, so it’s their turn to do something,” Som Mittal, president of Nasscom said in a statement.

Last month, Azim Premji, chairman of India’s third-largest IT services company Wipro, had also written to the PM asking him to seek the White House’s intervention in removing the discriminatory proposals in the bill.

Neeraj Gupta, CEO, Systems in Motion, an IT services company that focuses on domestic outsourcing, believes IT jobs shipped overseas to countries such as India could be retained in the US. “The proposed Bill has provisions to impact the basic elements of the H1B process and how these will work in the future. Therefore the Bill has to be debated and (at) multiple levels, across enterprises (and) senators before it is passed,” he states. 

(Read: Neeraj Gupta’s exclusive interaction with CXOtoday: The new immigration Bill has serious implications for the entire IT industry.)

Expers believe the bill has restrictive visa provisions that could put IT companies at a disadvantage against their US-based counterparts such as IBM, HP or Accenture.

Meanwhile, India has taken a few policy measures intended to support American corporations working in India. Among them are simplifying rules that govern transfer pricing agreements between US corporations and their India units. The government has also adjourned a preferential market access policy that demanded a majority of telecom equipment sold in India to be manufactured in the country.

However, since the announcement in June this year, companies that have over 75% of their US workforce relying on H-1B or L-1 visas were prohibited from getting any more visas by 2015. Indian IT companies argue that US does not have adequate skilled engineering talent, with the country’s unemployment rate falling from over 10% in 2009 to 7.3% in August 2013 and in the IT sector, there are less than 4% fully employed staff.