Going to America

A new US immigration bill holds good and bad news for Indian IT

The proposed US immigration reform bill is an ambitious attempt to overhaul the country's immigration procedures at both ends of the economic spectrum. Inevitably, political and media attention in the US will focus on the path to citizenship it lays out for some 11 million of the nation's undocumented migrants, who are primarily Hispanic, given that the fast-growing population is emerging as a powerful voting block.

But the Indian technology industry will be interested in the proposal, among others, to increase the H-1B visa quota by 69 per cent, to 1,10,000, with a provision for the cap to be raised to 1,80,000 under certain economic conditions and depending on demand. This should encourage companies like Infosys and Wipro, who have offices in the US and send thousands of workers there on H-1B visas, to keep costs down. Similarly, the technology industry in the US imports skilled labour to meet shortages, and has been lobbying for the cap to be increased or even eliminated. Measures like this one indicate that Silicon Valley is learning to translate its prosperity into greater political influence. And the growing clamour for a "startup visa" is reflected in the creation of a new visa category for foreign-born entrepreneurs. The bill also eases the path to a green card for foreign graduates from US universities in science, technology, engineering and math.

For Indian IT firms, that's where the good news ends. The H-1B visa has been criticised for allowing companies to employ foreign workers for lower pay than their American counterparts. At a time of relatively high unemployment, the new liberal visa regime comes with safeguards to ensure that US workers are protected. The bill would raise wages for all guest workers on an H-1B and require employers to advertise job openings to American workers. Companies that have a large proportion of guest workers will be subject to a higher fee and will eventually be ineligible to bring in more. Much of the operating costs of these IT firms comes from wages and any increase in salaries will affect their bottom line. The great Indian IT story appears headed for turbulence.

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