India to guard against wrongful penalisation of IT firms

Amiti Sen New Delhi | Updated on January 15, 2018


To keep up efforts to block Bills on tightening H-1B norms

India will stay vigilant to ensure the execution of the recent changes in the H-1B visa regime brought about by US President Donald Trump do not wrongly penalise Indian IT companie;, but New Delhi is unlikely to press for its revocation.

“Most of the reputed IT companies say they get only specialised Indian engineers to work in their US establishments. The new H-1B rules are unlikely to affect them. But it has to be ensured they get implemented in the right spirit,” a government official told BusinessLine.

The ‘Buy American Hire American’ executive order Trump signed on Tuesday lays down that H-1B visas should be used only to get highly qualified foreign workers and not entry-level employees who take away American jobs.

“As most Indian IT companies meet the minimum-salary requirement for the professionals they get to the US, it is established they are specialised and not entry-level programmers. We do not want genuine players to get unduly harassed by visa officers under the new dispensation, and will communicate our concerns to the US government,” the official said.

There could be a handful of Indian companies that may have brought relatively less-skilled workers on H-1B visas by showing wrong qualifications, but that is not the category Delhi wants to protect.

“In our discussions with the US government, we will not ask for revocation of the order as the time for it has passed and there is no pressing need to do so. But we will insist that all Indian IT companies should not be left in a situation of uncertainty to bring a few erring ones to the book,” the official said.

Citing the examples of the US, the UK, Australia and New Zealand, which are tightening their visa regimes for movement of skilled professionals and moving towards greater protectionism, Commerce Minister Nirmala Sitharaman said it was time for a global framework within which trade in services can happen.

“We will be actively pursuing our proposal in the WTO,” she told reporters on Thursday.

New Delhi has already complained against the US move to increase H-1B visa fees for companies, more than half of whose workforce consists of foreign employees, at the World Trade Organisation. But, it is yet to ask for a dispute settlement panel to decide on it.

“If Indian IT companies face discrimination in the implementation of the executive order against giving visas to entry-level workers, the matter could be incorporated in the WTO discussions,” the official said.

The wage factor

While the executive order is likely to be implemented only next year since the allotment process of H-1B visas for this year is currently underway, there is another pressing problem India has to address.

Delhi has to keep up its campaign against the various Bills related to the tightening of H-1B visas, including doubling of the minimum wage rate for the visas to $1,30,000 from the present $65,000, which could make life really difficult for Indian IT companies such as Infosys and Wipro that generate an estimated $65 billion worth of business in the US.

“Some (US) Democrat Senators have already indicated in private discussions with the Indian IT industry and officials that they are not in favour of the Bills aimed at tightening H-1B. We have to build on that sentiment,” another official said.

Even American companies such as Google, IBM and Cognizant, that have operations in India and often taken Indian employees on H-1B to work in their US offices, could be affected by the move.

IT industry body Nasscom is lobbying with US Senators and important office holders against the proposed Bills.

Published on April 20, 2017

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