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People gain but companies lose

Despite challenges, the US immigration bill is set to boost India-US economic ties.

ht view Updated: Apr 18, 2013 22:57 IST

Indian citizens will be winners and Indian corporates losers of the sweeping reforms that are about to change the face of US immigration. That both Republican and Democratic party leaders have joined hands to place the reform bill before the US Congress is an indication of how much keeping open ‘the golden door’ is seen as an essential element of the American psyche.

This is all the more commendable given that this is a time of economic hardship and political polarisation in that country. The biggest and immediate gainers will be roughly 11 million people living illegally in the US today — an estimated 400,000 of them being of Indian origin. The reforms will give them a clear path toward becoming American citizens.

In the long term, however, the major change will be the decision that citizenship for future immigrants will be made increasingly easier for those with job skills and entrepreneurial qualities. Until now, most immigrant visas have been biased towards family links.

Getting a US green card and eventual citizenship was easiest for those who already had relatives who were Americans. Education and entrepreneurship will now be equally important as family ties.

The latter shift will automatically give Indian migrants, especially those from the middle class, a huge advantage in becoming US citizens. One consequence of this reform will be that hundreds of thousands of Indians who have come to the US on temporary visas will now be able to migrate to citizenship much faster.

Right now, many live in a legal limbo in which they work, raise families and even own their own companies in the US but are unable to become citizens. If the US economy repairs itself over the next few years, there is likely to be an even greater emigration of skilled Indian minds than already exists. A sluggish Indian economy and paralysed polity will not incentivise them to stay home. There will be a traditional outcry against a “brain drain.”

It would not be untruthful to say much of India’s infotech success arises from the links that were developed with Silicon Valley thanks to emigrants. In any case, it would be a violation of India’s liberal democratic ethos to try and restrict the movements of its people.

India’s IT services industry will have mixed feelings. The US bill will increase the H-1B quota, but it will also bias L visas towards US firms rather than Indian subsidiaries in the US. This was not unexpected given the present economic climate and the reduced profile of New Delhi on Capitol Hill.

But the big picture is positive. The people-to-people relationship between India and the US is set to get rosier and that, in turn, will provide the greatest and most sustainable boost to economic ties.