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NASSCOM addresses H-1B visa misuse issue

Posted: 01 Jun 2007     Print Version  Bookmark and Share

Keywords:H-1B visa  outsourcing  US legislators 

NASSCOM sent a letter on behalf of the nine Indian companies to Senators Durbin and Grassley, addressing the issues raised by them in their letter of May 14 2007 (addressed to nine Indian IT companies) about reported fraud and abuse of the H-1B visa programme, and its impact on American workers (see Indian firms on H-1B visa misuse">U.S. legislators criticise Indian firms on H-1B visa misuse ).

NASSCOM has offered to meet and discuss the issue with the Senators. The NASSCOM response assures the Senators of support and co-operation by NASSCOM and its member companies on the larger issue of visa fraud and also echoes the Senators' belief that any fraudulent activity should be dealt with in the strictest possible manner.

It highlights that H-1 B visas are beneficial to both, US and Indian companies, and also to the US economy. It draws attention to the fact that many US industry leaders have repeatedly stressed the need to raise the H-1B visa cap, which was reduced from 195,000 to 65,000 two years ago. On the linkage between layoffs and the H-1 B visa, the letter notes that these two do not seem to go hand in hand as exhibited through the 2006 survey by Money Magazine. It also iterates that while the number of H-1B visas is currently very limited (currently capped at 65,000 a year), the H-1B visa is not limited to the IT sector or to Indians alone. In fact of the H-1 B visas granted in the year 2006, nearly 14,000 (more than 20 per cent) visas were granted to American educational institutions.

Among other significant areas mentioned at a broader level is addressing the mistaken belief that US-India trade is flowing primarily in one direction. As has been recognised widely, an overwhelming majority of the computers and software used by India's IT industry as also other sectors of the economy are those produced by US companies like H-P, Dell, Microsoft, Oracle, etc. The largest outsourcing contracts from the Indian private sector, as also from the Indian government, have gone to US companies. The rapidly growing Indian economy is importing ever-larger quantities of these goods and services. Meanwhile, Indian students now form the biggest group of foreign nationals studying in the US universities, spending an estimated Rs.12,680.94 crore ($3 billion) a year. The above instances indicate, very clearly that India, and its industries are strong proponents of building trade relationship further, in a mutually beneficial way.

The NASSCOM letter also calls for attention to the fact that there is a considerable body of evidence pointing to the contributions made by H-1B visa holders to innovation and entrepreneurship in the US which has resulted in job creation on a scale that is anecdotally well known and widely recognised, even though it has not been properly quantified.

H-1 B visa holders pay taxes, pay social security and make significant contributions to the local and national economy. Additionally, in the past two years, to combat potential fraud in H-1B and L-1 visas companies have paid more than Rs.1,268.09 crore ($300 million) in government-imposed fees to fund a State Department/DOL/DHS effort.

NASSCOM letter has particularly drawn attention to the specific clause in the Immigration Bill, which has been introduced by the two Senators that "prohibits companies from hiring H-1B employees if they employ more than 50 people and more than 50 per cent of their employees are H-1B visa holders".

NASSCOM and the Indian IT industry clearly see this as a protectionist measure that will affect Indian IT companies, reduce the number of H1-B holders going to the US and reduce the competitiveness of the IT industry in the US.

Finally, the letter notes that knowledge-based services trade has been a unique feature of India-US trade and NASSCOM and the industry are hopeful that the US will not specifically penalise non-US firms and continue to promote free and fair trade, so that this sector can continue to flourish as part of a broader US-India engagement.

- Dipti Agarwal
  EE Times India

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