Indian IT industry slams US move to hike visa fee (Lead)

August 7th, 2010 - 12:30 am ICT by IANS  

Bangalore, Aug 6 (IANS) The Indian IT industry Friday slammed the US government’s proposal to sharply increase visa fee to raise funds for its border security needs.
“The Border Security Bill, which was passed by the US senate late Thursday, will have a significant impact on the Indian IT sector, as it aims to raise about $600 million by increasing fee for H-1B and L-1 visas,” National Association of Software and Services Companies (Nasscom) president Som Mittal told IANS.

The proposed hike is expected to be about $4,500 per visa from $2,500 currently.

“We estimate the impact on Indian IT firms could be as high as $200-250 million per year,” Mittal said.

Several Indian IT firms avail H-1B and L-1 visas in thousands every year to fly their software engineers to the US for working at their clients’ locations as on-site techies.

Echoing Nasscom’s concern, IT bellwether Infosys Technologies Ltd termed the US Border Security Bill unfortunate and discriminatory at a time when companies have to be more competitive in an open market scenario.

“It is unfortunate that this tax (fee) is being levied on a discriminatory basis when the need is to open markets to make companies more competitive in the global market place,” Infosys board member T.V. Mohandas Pai said in a statement.

As a global software major, Infosys has been recruiting in the US at all levels, including for its global internship programme InStep.

“We have to study the details to ascertain the actual impact of the hike in fee for H-1B and L-1 visas currently,” said Pai, who is also the company’s human resources department, education and research head.

Though Tata Consulting Services (TCS) declined to comment, a senior Wipro official said the company would endorse the concerns expressed by the IT industry representative body (Nasscom).

The Obama administration plans to increase fee for each H1-B or L-1 visa application by a company that employs 50 or more of its people in the US.

“While we understand the need for the US to protect its southwest borders, it seems that the funding proposed by this bill will be from the Indian IT sector,” Nasscom said in a statement earlier.

Noting that Indian IT firms only take a fraction (under 12 percent) of the total H-1B visas, Mittal said such a discriminatory move would unfairly reduce the competitiveness of Indian firms, as US companies, which also use these visas in large numbers, would remain unaffected.

“We believe this will have negative impact on Indian companies, which are investing in the US, employing US talent, driving US technological talent and aiding the US economic recovery,” Mittal asserted.

Secondly, in the absence of a totalisation agreement, Indian firms and Indian citizens pay over a $1 billion to the US in form of social security, with no benefit or refund.

“This bill is indirect protectionism and contrary to the Obama administration’s repeated pleas to the international community to avoid taking such actions,” Mittal said.

The adoption of these provisions by the US hinders the free movement of people essential for promotion of free trade, he said.

“This move will also lead to diminished inflows of Indian talent, which is helping to drive US tech innovation and spur US recovery,” Mittal said.

Nasscom is working with various agencies of the Indian government to take up this matter with the US administration.

“We hope that the US would take necessary steps to enable a positive environment for international trade.

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