The US has inched closer to adopting comprehensive immigration reforms, in a move that could compel Indian IT services companies to alter the way they operate in the world’s largest market for technology services.
On Thursday, a legislation to overhaul America’s immigration system was passed with strong support in the US Senate. However, Indian IT companies are confident that the Bill may not be adopted in the current format, as it will now be sent to the US House of Representatives, which is working on a similar Bill, minus the negative provisions.
In a statement released on Friday, software industry body Nasscom said the passage was on expected lines. “These proposals amount to punitive treatment of this industry. This fails to recognise the vital services that global IT services companies deliver; the innovation and competitiveness they have spurred in thousands of US businesses, and the investments these global IT services companies make in the US,” it said.
The Bill has three main proposals that would be detrimental to Indian IT companies. Firstly, a company with more than 15 per cent of its workforce on H-1Bs (job visas) will be restricted from placing more H-1B workers on client premises. Secondly, from 2016, any company with more than half of its staff on such work permits will be unable to apply for more visas, effectively creating a cap on temporary immigrant staff.
Thirdly, the Bill imposes a fee of $10,000 per visa from large companies, that have more than half of their staff on H-1B visas.
“In effect, the Senate Bill would dictate how American companies can and cannot pursue their business operations and select business partners in the future, when the importance of information technology and process management will only continue to increase,” the Nasscom statement added.
Sanjoy Sen, Senior Director, Deloitte in India, said: “The critical need for Indian IT/ ITES companies is to now move up their customers' value chains, which in turn is enabled by moving a greater proportion of staff from offshore to onshore delivery modes. The US immigration Bill, in its current form passed by the Senate, will clearly impact their agility to do so.”
However, not all hope is lost for Indian IT companies. Nasscom has been assured that its concerns will be addressed in the House version of the Bill.
“The Bill has to go through multiple stages. As expected, the first stage is over. The House version of the Bill is not yet readied, so we do not know whether it will be multiple bills or single bills… We are carefully watching the process and will wait till the process moves forward and the final version of the Bill is readied,” said N. Chandrasekaran, Chief Executive Officer and Managing Director of Tata Consultancy Services.