H-1B visa row: IT industry keeps its fingers crossed

iit kharagpore in west bengal--sandipan chatterjee
Learning time: A good number of students have already started looking for other countries than US

After more than two months of silence on the issue, Indian Prime Minister Narendra Modi had recently raised concern over the Donald Trump administration’s latest clampdown on H1-B visa holders. He has urged the US, which accounts for 65 per cent of $155-billion Indian IT revenue, to have a “balanced and far-sighted” perspective on movement of skilled professionals.

Separately the Indian ministries, authorities and industry lobby had a word with a visiting eight-member US delegation, headed by Congressman Bob Goodlatte, on the issue. All these developments have given a sigh of relief to Indians, who are by far the largest group of recipients of the 65,000 H-1B visas issued each year to new applicants under a cap mandated by the US Congress. But the fear still prevails among IT companies and professionals.

Amit, who recently graduated in mechanical engineering from a top school in the US, had been looking for a job in the ‘land of opportunity’ for past few months. Trump’s “America First” rhetoric on jobs has made him worried and scared as his dream to permanently settle in the US is on the verge of shattering down. Neha, another brilliant student who passed out from a top university of India, says, “I was planning to travel to the US for a better career opportunity but the proposed changes in H-1B visa is likely to become a big obstacle in pursuing our dream.”

Not only tens of thousands of youth who had just passed out from Indian IT institutes and were looking for a bright future in the US, but also the students studying in the US who eyeing better job openings are finding themselves in a tight spot. The proposed crackdown on H-1B visa by Zoe Lofgren, a Democrat who represents Silicon Valley, and supported by Trump has put these students’ money, career and dreams at stake.

Reports suggest that nearly 75% of all Fortune-500 companies are serviced by Indian IT firms.On the other hand, some of the top IT firms doing business in India are of American origin. Cisco, Google and Amazon are just a few names to mention. Indian technical industries, according to Assocham figures, offer $65-billion worth of IT trading services to the US each year. “If the proposed Bill on H1B visa is implemented, Indian companies are likely to suffer 10 to 15 per cent loss in IT trading services,” said Assocham Secretary-General DS Rawat. “The small and medium IT companies will suffer most in the short term and big companies in long term.”

From 2005 to 2014, 86,000 H-1B visa had been issued to Indian professionals. More than any other industry, US tech firms depend on the 85,000 foreign workers allowed into the US annually under the H-1B visa programme. The proposed Bill will be a deterrent to the entry of fresh IT professionals seeking jobs from India, or any other countries for that matter.

The proposed H-1B visa Bill will not only increase the cost of Indian IT firms but also make recruitment of fresh foreign professionals difficult, keeping them away from the benefits of the new increased wages of $130,000 a year. “Those IT professionals already working in the US within the limit of $ 60,000 wage a year would immediately lose their jobs. The Bill, if passed, will make almost 15 to 20% Indian IT professionals jobless “said Gaurav Tripathi, joint director, international affairs, at Assocham.

Different ministries have come out strongly on this issue. “We had taken up the issues with US administrations and also the Congress to convey that Indian software professionals have added to the competitiveness of the US industry,” said India’s foreign ministry spokespersons Vikas Swarup. “Let’s not prejudge the outcome because we have seen what had happened to similar Bills in the past. The Bill is yet to pass through the entire Congressional process.”

Commerce and Industry Minister Nirmala Sitharaman recently said, “We are concerned and will talk to IT industry how they are dealing with the situation. Even the IT Ministry is in regular touch with the National Association of Software and Services Companies (Nasscom). We are keeping vigil at every development.”

On H-1B visa issue, the government and IT industries are on the same page. The chief executives of big technology companies had recently visited Washington DC. “CEOs from TCS, Infosys, Wipro, Mahindra Tech and few others companies were part of the delegation to lobby with the US administration and Congress,” said Nasscom president R Chandrasekhar, who was part of the delegation. “We have already shared our concerns with our government and are simultaneously trying to persuade US authorities. We have discussed each and every issue and highlighted studies that suggest Indian companies had generated more than four lakh jobs in the US.”

There is strong speculation that the Bill won’t get the support of full Congressional process. There is also a possibility that the legislation may not be implemented in absolute terms and get diluted under pressure from both US and Indian IT companies. As American companies have more to lose if this new bill is passed. “I think the loss to American companies due to this move has not even been taken into the account,” said Chandrasekhar. There would be a huge shortage of skilled workers, which will directly affect their businesses.

“This move will pave way for migration of the Indian IT business from America to neighbouring countries,” said Gaurav Tripathi, Joint Director, International Affairs at Assocham. “Students, who want to pursue their high studies in the US to have a better opportunity of jobs, would move to the other countries. Hence, it will lead to big revenue loss to the American universities.”

An overseas education consultant said a good number of students have already started looking for other countries instead of the US for higher education and better jobs. Countries such as Canada, Australia and New Zealand stand to benefit from these changes. Already, the number of students going to Canada has increased tremendously. In the year 2011, more than 27,000 students went to Canada. The number rose to 48,588 in 2015. From July 2013 to July 2016, 68 % students migrated to Australia, the percentage for the US were only 25. The UK was worst with just 44 students.

Even American technology giants such as Apple, Facebook, Google, Microsoft, Intel, eBay, Uber and Twitter have shown their concerns and warned the their government about the consequences of the move. Now the matter is in the hands of the US Congress as Indian companies are busy considering other options as a precautionary measure.

“If the new legislation comes into effect, it will have only short-term impact on Indian companies. However, it will certainly not end the IT business ties with the US,” said Rawat. “Other countries have started offering opportunities. Canada has already extended an olive branch to Indian companies and asked them to come and invest in Canada and service the US clients. It has been happening in automobiles industry for a long time.”