IT cos bet on PM Modi's tough talk with Donald Trump on H1B visas next week

The fee hike is set to be implemented from October 2, 2020

As Prime Minister Narendra Modi readies to go to the United States this weekend, the Indian information technology industry hopes that he will talk tough on visa issues plaguing the sector, as well as highlight the contributions India is making towards hiring locals in the US.

The H-1B work visas, which allow highly skilled foreign workers to travel to the US, have been at the centre of a storm since US President Donald Trump’s presidential campaign.

The over USD 155 billion Indian IT outsourcing industry has been a beneficiary of the H-1B visa programme, the most favored route to send Indian engineers to the US, and has for long been accused of misusing the current system to send more people to the US.

A total of 13 Bills are pending in the US Congress related to the larger issue of immigration, out of which four Bills are about H-1B, six Bills are about outsourcing and three are about immigration.

In April this year, Trump signed an executive order named “Buy American and Hire American” in which he tasked the US Secretary of State, Attorney General, Secretary of Labor, and Secretary of Homeland Security “to suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid beneficiaries.”

“Our request to the (US) administration is to be mindful of the unintended consequences of implementing such requirements,” Shivendra Singh, ‎vice president and head of global trade development at industry body National Association of Software and services Companies told Moneycontrol.

At present, the US has a cap of 65,000 visas for the general category under H-1B visas. It allows a further 20,000 people who have a US master's degree from an accredited institution to also apply. The visas are awarded on a lottery-based system, to randomly select the petitions.

'Bureaucrats can't assess IT skills'

Singh said that skills are an evolving space, and even the companies recruiting candidates find it a challenge to find the right people. “How would a bureaucrat be able to understand and evaluate those skills, because there is so much dynamism in the skills space,” he added.

Awarding visas based on the highest wage also suffers from its own issues, such as the huge pay difference between Silicon Valley and other regions in the US and India, Singh said.

Nasscom has said earlier that in fiscal year 2015, only six of the top 20 H-1B visa recipients were Indian companies, and that the average pay for H-1B visa holders was a little over USD 82,000, apart from a fixed cost of about USD 15,000 incurred for each visa issued.

Also read: Trump amends H1B rules, entry level techies to be hit hardest

H-1B visas are also used extensively by US-based technology companies for transfer of skilled techies to US-based locations. The most common argument against the use of these visas is that they have helped Indian IT services firms to keep costs low and gain an advantage over global competitors.

However, there is also a STEM (science, technology, engineering and maths) skills gap which necessitates the transfer of skilled manpower to the US.

“It’s a major issue for US based companies too,” said a Washington-based source aware of the thinking of US-based companies, and did not wish to be identified.

He added that the conversation around work visas between PM Modi and President Trump is expected to be largely positive. “What I am hearing is that on the Hill, nothing will move this year on H-1B, if anything you could see some movement next year,” he said.

Nasscom also hopes that PM Modi would highlight the Indian IT services’ companies’ efforts to create local jobs.

“This is an ongoing process, and we will continue to do it, as long as we continue to find skilled people. We are now increasingly working with US States where our companies have presence, work with universities and community colleges to work on reskilling programmes to try and get the right skillset. We are doing it on an ongoing basis,” said Singh.

neha.alawadhi@nw18.com