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H1B reform Bill to expand annual quota affecting Indian IT firms

A new piece of legislation introduced in the US Senate, backed by technology giants like Microsoft and Facebook, has sought to increase the annual H1B visa quota to encourage the migration of talented engineers to the United States.

The Immigration Innovation (I-Squared) Act-2018 introduced by Republican Senators Orrin Hatch and Jeff Flake recently, advocates increasing the number of base H1B visas from 65,000 to 85,000 a year and creates a plan that allows the issuance of these visas based on market demand.

The H1B is a common work visa granted to high-skilled foreigners to work at companies in the US. Its validity is three years and can be renewed for three more years.

The new Bill seeks to prevent the H1B visa programme from being used for outsourcing jobs or undercutting American wages. It allows the US government to raise as much as $ 1 billion from increased visa fees to fund science, technology, engineering, and mathematics (STEM) education as well as train workers in the country. It also allows workers on H1B visas to shift jobs without affecting their legal status in the US.

If the Bill was approved, this could be a big setback for Indian IT services companies, experts said, citing the higher salary norm and the threat of increased brain drain.

“Whether it is Google (CEO Sundar Pichai), Microsoft (CEO Satya Nadella) or Facebook — these companies are beneficiaries of H1B visas, so they will be natural supporters. The minimum salary will also be increased to $100,000, so these companies can attract talent,” said Kris Lakshmikanth, CEO and managing director of Head Hunters India, a Bengaluru-based recruiter for global technology firms. “Because of the minimum salary, the number of people going to the US from TCS or Wipro will come down. They will hire locally,” he added.

Lakshmikanth said overall this was not very good for India. “We will see more brain drains. The Sundar Pichais of the world will not be available for us. We have to live with that.”

Indian IT firms, once the biggest beneficiaries of the H1B visa regime, have consistently reduced their dependency on such visas and have increased focus on local hiring in the US.

An increased outrage against offshoring and outsourcing to India, protectionist measures by both the previous Obama administration and the Donald Trump presidency and a shift in technologies towards digital have made them to invest in campuses in the US and hire talent from local colleges.

India’s software lobby National Association of Software and Services Companies (Nasscom) has advocated a more liberal visa regime that will allow better labour movement from India to overcome the shortage of over one million engineers in the US. Nasscom President R Chandrasekhar did not respond to calls or text messages for comment.

This is not the first time the two Republican senators have introduced the so-called I-Squared Act. In the previous two Congress sessions, they had unsuccessfully placed their Bill, demanding liberal H1-B visa provisions.

An executive of an Indian IT services firm, who did not want to be named, said it had to be seen whether this Bill would be passed, considering Trump’s anti-immigration focus. “The fact is that US technology companies need IT talent. The Bill has the backing of the technology world, considering the US politics is so divided, we need to see how this will fare,” said the executive.

Source: Business Standard


Cochin Herald

All stories by: Cochin Herald