Indian Outsourcing Body Criticizes U.S. Law Hiking Visa Fees

Jacob Cherian August 16, 2010

Following the passage of a new U.S. law that raised fees for work visas to the U.S., top outsourcing countries have expressed their discontent at the legislation. India is a major player in the outsourcing arena and U.S. firms routinely outsource their IT work to Indian outsourcing giants like Wipro, Tata Consultancy Services, and Infosys.

In essence, the controversial legislation was enacted to tighten security at the Mexican border in the wake of an immigration crisis in the U.S. However, it will also impact outsourcing countries like the U.S. in a negative fashion since costs for visa fees will hamper the transfer of Indian employees to the U.S. under the work visa.

President Barack Obama signed the law, which stipulates that visa fees will go up twice as much for IT employees entering the U.S. for work purposes. This accounts to a 600-million dollar bill and is largely due to the backlash emanating from outsourcing American jobs overseas in post-recessionary conditions. With the unemployment rate at very high levels in the U.S., skeptics of outsourcing have been calling for an end to the shipping of jobs abroad. Since so many Americans have lost their jobs due to the recession of 2008, and companies are looking for a competitive edge from outsourcing, the term outsourcing has evolved into a double-edged sword. While it means savings for companies that normally to not invest heavily in IT, it also means that a significant number of computer science personnel and engineers in the U.S. have to undertake contract jobs that pay by the project.

NASSCOM, (National Association of Software and Services Companies) President Som Mittal said in a statement that the U.S. policy in question is sending a signal that is loud and clear that foreign persons are not welcome to the country. And this is a kind of discrimination, he told the AFP .

The Confederation of Indian Industry chief, Chandrajit Banerjee, was quoted as saying in an online report that strong security on the Mexico-U.S. border is a significant concern. However, these kinds of illegal immigration problems are not associated with temporary work assignments taken up by skilled professionals,” he said.

According to analysts, the U.S. and India have been working together for a partnership in several areas of technology including nuclear technology and this law will dampen some of the progress that has already been made in the last administration. Moreover, protectionist measures taken in the Obama administration are likely to cause tensions between the two countries that are relying on each other for sharing of technology in a variety of industries.

Specifically, the new law is likely to harm skilled workers coming into the U.S. because they are exported from India to American firms that have foreigners occupying more than 50% of their jobs. Since many U.S. firms outsource to India, this is likely to hit the IT outsourcing industry in a negative manner.