No visa for firms hiring less than 50 percent Americans

Bangalore: After Washington's decision to double the visa application fees as a part of its border security law, another bill has been proposed to axe visas (whether H1-B or L1) to foreign companies that do not employ at least 50 percent local people in the U.S.

The Comprehensive Immigration Reforms Bill, which aims to curb illegal immigrants to the U.S. from Mexico, is likely to hit the Indian IT outsourcing industry in November, with potentially disastrous consequences.

If the bill is passed, it is expected to affect the Indian IT outsourcing sector, which is nowhere near this 50 percent figure and still relies on H1-B and L1 visas to transition clients' contracts offshore.

"Most politicians are trying to capitalize on the issue on the back of rising unemployment and a lot of negative sentiment floating around that," said a senior executive of one top Indian IT outsourcing firm. He did not wish to be named, as his company has significant business interests in the U.S.

Indian IT service companies depend heavily on H-1 and L-1 visas to send engineers from India on a temporary basis to transition clients' work to India: gathering client business requirements, getting the design ready; and sometimes to support a client's IT infrastructure maintenance works onsite.

Most companies also send Indians for various front-end roles like account management, relationship management and sales and support. Besides, most IT employees in India consider onsite (U.S.) postings a prime motivation factor to further their career growth. If that disappears, most companies will find it difficult to get talent.

Nasscom, the apex industry body representing the software services industry in India, has been asking U.S. authorities and lawmakers to introduce temporary service visas or work permits similar to those of the UK, Germany and France. It made this clear in 2009 when senators Chuck Grassley and Dick Durbin were planning to introduce the Visa Reforms Bill in the U.S. Senate.

A major part of the Durbin-Grassely proposals are now believed to have been incorporated in the Comprehensive Immigration Reforms Bill. Nasscom is awaiting an official draft of the Bill before renewing its campaign against the move.

According to Nasscom President Som Mittal, there is no official draft available at the moment, which is why there are many versions floating around. There are discussions between the U.S. administration and Congress on a 10-point agenda on the shape of the Bill.

Industry insiders say the recent spurt in anti-outsourcing initiatives in the U.S. are due to political reasons. The U.S. economy is also passing through a rough patch, with talk of double-dip recession growing louder with each passing day. Unemployment rates are high and private indebtedness is very high.

Because of growing fiscal deficit, most new U.S. government programmes are self-funded, otherwise it would be difficult to get Congressional approval.