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US visa curbs aren't scaring India Inc

world Updated: Aug 10, 2010 23:57 IST
Anirudh Bhattacharyya

New York Senator Chuck Schumer may have described Indian information technology giant Infosys as a "chop shop", but what the Bangalore-based company has been chopping is the number of its H1B hires.

And given lower demand for that visa, analysts believe that the recent Bill passed by the United States Senate levying a penalty on firms based in America with more than 50 per cent H1 and L1 visa employees, is a populist gimmick in an election year.

The mid-term congressional and state elections in the US are just three months away.

The numbers present a stark picture of how the H1B isn't as popular as it once was.

The cap for the fiscal 2009-2010 was only reached in January this year, while the uptake for the current year has been worse — just 28,500 petitions as against the available quota of 65,000 H1Bs.

And Infosys is actually the leading company in sharply reducing its H1B intake.

In 2008, it had 4,559 HIB visas approved; that number dropped to just 440 in 2009, a drop of over 90 per cent.

Demand has also dropped from Wipro, another company targeted by the Bill's proponents, while US majors such as Microsoft and Intel have increased the number of H1B hires, according to data available.

The bill sponsored by Senator Schumer and Senator Claire McCaskill of Missouri primarily seeks to tighten security along the US-Mexico border, and proposes to raise funding for its objectives, including unmanned drones, through penalties on mainly Indian companies.

Vivek Wadhwa, Senior Research Associate at Harvard University, described the bill as "bizarre."

In fact, illegal immigration and a tighter rein along the US border with Mexico will be a major issue leading up to the elections and the Democratic Party, to which Senators Schumer and McCaskill belong, has been on the backfoot on this issue.

Immigration attorney Cyrus Mehta said, in this regard, "It's a symbolic gesture. They are trying to show they are doing something. It's basically political."

The political factor behind this Bill was also underscored by Sanjay Puri, chairman of the lobbying group USINPAC, as he said, "While the security of the US borders and the protection of American jobs are of prime importance, it should not be done to score points during a heated political climate."

The provisions of the Bill, though, will last through 2014, if, in fact, it is passed by the House and signed into law by US President Barack Obama. The House could take it up as early as this week.