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US blues for Indian tech firms

Proposed law tightens visas for on-site work that helps firms keep costs low

india Updated: Jun 10, 2013 03:05 IST
Yashwant Raj

The immigration bill goes before the US senate next week, and it may or may not go through. Either way, message for Indian IT firms here will be the same: it is time to change and go local.

Infosys, Wipro and TCS have been targets of barely concealed hostility from US competitors and lawmakers since work started on an immigration reform some weeks ago.

H-1B and L-1 work permit visas, required by foreign workers, form a large part of the effort, bringing IT firms dependent on them, mostly those from India, under harsh scrutiny.

"There are some specific abuses of H-1B," said Democrat senator Richard Durbin at a senate hearing on immigration reforms, pointing to Infosys, Wipro and TCS.

"Americans will be shocked to know the H-1Bs are not going to Microsoft but to these firms -- largely in India -- who are finding workers (and) engineers who work at low wages in the United States for three years and pay a fee to Infosys or these companies," he railed. His views have been endorsed by firms like Microsoft.

India’s IT firms and government say on-site service in client sites is about trade and free movement of services but protectionist urges in unemployment-hit US are strong.

“What these companies need to do is to hire more people in the US,” Vivek Wadhwa, IT entrepreneur turned Silicon Valley activist, told the Hindustan Times.

Indian firms do not say what share of their US-based workers are local.

“Wipro employs more than 10,000 professionals across 48 states in the US,” wrote Wipro Technologies’ Dirk Lewis in an email reply to HT. While acknowledging a “vigorous” hiring programme in the US, he declined to give details. Infosys also declined to share the break-up between H-1B and L-1 visas. TCS and Mahindra Satyam didn't respond at all.

Indian IT firms are among the Top 10 recipients of H-1B visas every year (see graphic). That has attracted charges of stealing US jobs with cheap foreign labour.

Industry sources said these firms could begin hiring locally and pass on the higher wages to clients.

Wadhwa sees other dangers. “The net effect of this anti-India hysteria will be to cause more work to be done in India and to raise costs for US companies.”

The bill, meanwhile, crawls through the US legislative process.