Protectionism by means of tariffs and countervailing duties is one thing, but what three workers’ groups in the United States have done — asking people not to join three companies, including Infosys, because those are not hiring locals there in ‘sufficient numbers’ — is exerting pressure through other ways. What is more significant is that this comes when Prime Minister Narendra Modi has received an invitation from President Barack Obama to visit the US a few months later.
The issue of not hiring locals has come to be spliced with a bigger problem of jobs being eroded in the US and other Western countries because of outsourcing done by companies there. It is in this connection that Mr Obama had complained, when recession was raging in the US, that jobs were being created in Bangalore to the detriment of Buffalo, New York state. Much of India’s approximately $100-billion software and BPO success story is about this. Companies abroad saved by outsourcing jobs, which benefited Indian companies too.
This is one aspect of the problem. For Infosys this is the third factor to be concerned about, coming as it does at a time when the company is faced with the problem of exits of people in high positions and a falling revenue growth rate in comparison to its peers. About three and a half years ago, an Infosys employee, Jack Palmer, brought charges of visa misuse against Infosys. Though Infosys won the case against the company and the judge in Alabama had said Mr Palmer had failed to prove his allegations, some part of the charges did definitely stick as the company had to pay a fine of $34 million last year for ‘offences’ similar to the one that Mr Palmer had talked about.
Also a bit strange is the fact that the development comes after the sharp hike in the value of H-1B visas (long-term) and the cap of 65,000 was fixed on them by the US Congress. So this is something Mr Modi could take up with Mr Obama. Indian companies have suffered because of the US denying the benefits of stimulus to those that outsourced work. They should not be subject to further hectoring or lobbying.