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US visa law looms, India howls

business Updated: Aug 14, 2010 00:02 IST
Anirudh Bhattacharyya

As US President Barack Obama braced to sign into law on Friday a controversial Border Security Bill that would hurt Indian software firms by penalising those who use a large number of H1B work visas, it faced howls of protests in India.

The US administration faces diplomatic protests by India and anger in Indian companies who see the measure as unfair, but does not appear poised to reverse the Bill passed by the US Congress.

The Indian government has issued demarches to the White House and other US agencies, conveying its concerns over the "discriminatory nature" of the legislation. One person with knowledge of those discussions said "India's deep concern" had been "pretty much communicated" to various US agencies.

In New Delhi, Nasscom came out strongly against the Bill.

"We are frustrated by the lack of understanding in Congress about benefits brought by our companies that includes talent infusion, economic growth and job creation in the US," said Som Mittal, president, Nasscom.

He said Nasscom would work with US administration and Congress to find ways to help mitigate the impact on IT industry. The US plans to use money raised from taxing H1B and L1 visas through higher fees to prevent illegal entrants in its southwest border, and also boost law enforcement. But there is no direct mention of this in official US statements. Indian representations have focused on the "pay for provisions" whereby US-Mexican border security would be improved by hikes in fees for H1B and L1 visas of $ 2000 or more. This will apply to companies where more than 50 per cent of employees are on these work visas.

While the visa regime could hurt Indian IT companies, the costs are not considered significant. "The billing for an on-site US client could increase by $1 per employee per day after this law comes into effect. The IT firms would hardly feel any economic impact due to the law," said Viral Thakker, executive director at global advisory firm KPMG India.

(With inputs from HT Business Bureau, New Delhi)