Delink trade and immigration issues: NASSCOM
While the Obama Government’s recently tabled immigration reforms bill lives up to America’s heritage as a nation of immigrants, addressing problems around skills shortages, lack of talent and a technically skilled workforce in the US, there are concerns that it could have an adverse impact on the Indian IT-BPM industry.
NASSCOM, while welcoming several parts of the bill, is however worried about certain specific sections that impose labour mobility conditions on highly skilled people.
According to NASSCOM, the proposed bill will create the following problems for Indian organisations:
- Lower their access to visas
- Increase the costs of visas (higher visa fees and higher salaries)
- Increase documentation, attestation and audit processes
- Restrict employees from working on customer sites
- Link the issue of free movement of skilled talent for project-related work with the larger issue of immigration
NASSCOM is against discriminatory practices and believes they will undermine the contribution that the Indian IT-BPM industry is making to the US economy by paying taxes and social security, creating jobs and transforming organisations and making them more competitive.
It is also important to consider the fact that the IT sector unemployment rate in the US is now below the traditional rate for ‘full employment’. Based on the US Labour Department data, the headline unemployment rate—stands at 7.6 per cent. The unemployment rate for software engineers was 2.2 per cent in Q1 of 2013, down from 2.8 per cent in 2012. The lack of local US talent in this sector makes it difficult for all organisations to hire locally.
A recently released report by the National Foundation for American Policy (NFAP) has stated that between fiscal 2006 and 2011, the top 25 India-based companies utilised between 6 and 15 per cent of the new H-1B visa approved for initial employment, and about 20 per cent in fiscal 2012, representing only 0.017 per cent of the US labour force. In fact, Stuart Anderson, NFAP’s Executive Director has stated that “Research indicates measures to restrict the use of H-1B visas are not based on sound evidence and would represent a serious policy mistake that would shift more work and resources outside the US.”
The bill has been tabled in the Senate and will go through discussions and debate. While those who have introduced restrictive clauses may have got influenced by vested interests, there are others who are balanced, and understand that discriminating provisions never work. NASSCOM has raised these issues with the Indian Government, which has responded with alacrity. The Finance Minister, Commerce Minister, External Affairs have all raised their concerns with US authorities.