Nasscom to ask Bush to raise H1-B visa cap
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Nasscom to ask Bush to raise H1-B visa cap

The present annual cap of 65,000 visas for Indians is far too low and needs to be raised to meet the growing industry demand, the Nasscom chief said.

india Updated: Feb 21, 2006 21:22 IST

The National Association of Software and Service Companies (Nasscom) will take up the issue of enhancing the H1-B visa cap for Indian IT professionals during US President George W Bush's upcoming visit to India.

The present annual cap of 65,000 H1-B visas for Indian professionals was far too low and needed to be raised substantially to meet the growing industry demand, Nasscom president Kiran Karnik told reporters in Bangalore on Tuesday.

"Though there are no great issues with the US, we are concerned with the existing cap on H1-B visas, which continues to trouble us," Karnik said.

He added, "This is something even the US corporations are concerned about and share with us."

"We intend to take up the issue with President Bush during his forthcoming visit to India (March 1). Since the US administration too understands our needs, we hope they address it."

"Indications are some moves are afoot in this direction," Karnik said on the sidelines of the second Sino-India software industry cooperation summit.

Recalling how the number of H1-B visas for Indian professionals touched a peak of 195,000 annually not long ago, Karnik said the Indian IT industry would be comfortable if the cap was more than doubled from the present level.

"We are looking at a cap substantially high enough to bridge the demand-supply gap. We want market forces to be the deciding factor as the Indian IT industry is the major user of the H1-B visa," Karnik pointed out.

The other major issue worrying Nasscom is the social security system or totalization agreement for Indian professionals working in the US under H1-B visa.

"Even the high fee structure for H1-B visas is concern for us because Indian professionals are made to pay up taxes for social security without any benefit. Since the H1-B visas are only for three-to-six years and social security benefits flow only after 10 years, Indians stand to lose out on them," Karnik lamented.

To overcome the problem, Nasscom has suggested the US government could refund the tax deducted under the social security system at the end of the work permit on the lines of some European countries.

"We are not against the deduction per se. Collect the social security tax, but refund the amount when the person leaves for home, as is being done by some Scandanavian countries like Finland and Sweden," Karnik affirmed.

In fact, Nasscom is in talks with more countries to introduce a similar tax system for the benefit of Indian IT professionals going abroad on work permit visas for onsite work or executing projects over a long period.

Nasscom also plans to bring to Bush's notice the urgent need to hasten the process of issuing H1-B and L1 visas.

"We are not against safeguards for L1 visas, but new restrictions should not be adverse. We agree L1 visas should not be misused. But the process should not take too long," Karnik said.

While H1-B visas allow companies incorporated in the US to employ professionals from overseas, L1 visas is more temporary in nature and is issued for transfer of an employee from overseas to the US.

In this context, Nasscom hoped the opening up of a US consulate in Hyderabad soon would benefit the Indian IT firms in reducing the time taken to process their visa applications.

First Published: Feb 21, 2006 18:30 IST