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India 360: Indian IT troubles for US

May 18, 2007 02:13 AM IST India India
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New Delhi: Its election year in the US and two lawmakers have raised the outsourcing bogey again. Two American senators have alleged that Indian IT companies are displacing American workers by hiring Indians at lower wages and are misusing the H1B visas.

They have written to nine Indian companies asking them to explain how they are using the H-1B visa programme.

Indian companies have reacted to this saying these allegations are unfounded and that there has been no abuse of H-1B visas on their part.

The NASSCOM has gone one step ahead and has said that a trade issue is being confused with immigration and Commerce Minister Kamal Nath has said that he will take up the matter with the G-4 in Brussels.

The question that was being debated on India 360 was: Is the US paranoid about the influx Indian IT professionals? Or is this simply rhetoric in an election year?

On the panel to try and answer the question were TVA Infotech President, Suhas Nerurkar; and National President Indo-American Chamber Of Commerce, Deepak Pahwa.

VISA POWER: WHAT IS H-1B?
bullet It is a US non-immigrant visa category.
bullet It allows US companies and universities to seek help from skilled foreigners.
bullet Under the H-1B, employment is only temporary.
bullet Under this, a job is considered specialty occupation.

Corporate America Supports India

The study on the basis of which these senators have written these two letters actually stated: 'Indians working on H-1B visas get nearly $13,000 less than their American counterparts with the same qualifications'. The senators have alleged that Indian companies are hiring Indians to cut costs and are thus displacing qualified Americans.

Deepak Pahwa was convinced that there were many misgivings in what had been stated by the US senators. "These two gentlemen are raising an issue, which has always been raised prior to election time in the US. I think they need to do a lot more homework," he said.

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However, he added that India needed to find out more about the fax before deciding on the course of action to be taken.

"I will go back to what Mr Ron Summers has indicated in reaction to this. He said: 'the US companies are very strongly in favour of making sure that the coalition for economic growth is fully supported'. There are almost 3 million US companies which are supporting this programme. I think it is important for us to realise that the entire US business community is substantially in favour of this," he added.

All For A Permanent US Stay?

The American senators have also alleged that the intent with which Indians use the H-1B is also suspect, because their ultimate aim is to get a work permit and stay in the US permanently, and therefore this constitutes immigration.

H-1B CRITICISMS: AMERICAN POINT OF VIEW
bulletThe 'misuse' of H-1B has lowered wages in fields such as computer technology.
bulletIt has also displaced many US citizens who are qualified technical professionals.
bulletUS alleges that the H-1B encourages brain drain in source countries.

To this, Suhas Nerurkar said, "I don't think that Indian companies are sending their employees to the US so that these people can settle there permanently. In fact, most of the work that these people do there is of a substantially short period - sometimes not even three years. Some part of the work does require on site coordination for the projects offshore."

"I am not sure which part of the work the US senators are objecting to. If they are objecting to the on site coordination part of the work, because that is for offshore projects, the I don't know what visa -- other than the H-1B -- would these gentlemen require to go there and work, because there are only three visas and H-1B is the most appropriate," he added.

How valid then, is the argument, that this really is not an inter-governmental issue, but is an issue between the US and private Indian IT companies and therefore the governments should not get into it.

"I think it is a trade related matter and not an immigration related matter. As Commerce Minister Kamal Nath has also reacted today, this would come in the way of our expansion services agreement under the World Trade Organisation. So I think, while one is looking at a level-playing field in all areas, the US government which encourages all that should really step back on these issues," said Pahwa.

Will The Din Die Down?

H-1B QUOTA

The annual quota is subject to Congressional mandate.

In 1998, 115,000 visas were allocated.
In 2000, 195,000 visas were allocated
In 2004, 131,000 visas were allocated.
In 2005, 117,000 visas were allocated.
In 2006, only 65,000 visas were allocated.

Nerurkar said that one saw the same argument coming up when US shifted bases to China and Taiwan and now there is a din over Indian outsourcing. He said he was sure that the din would die down.

"If there are any discussions with the senators and the companies, then they can go ahead with the same. I really wouldn't read too much into this," he said.

The two concluded that one would simply now have to wait and watch how Kamal Nath dealt with the issue at the G-4 Summit.