INDIA’S H1B WORRIES

From April, the premium processing of H1B visas, the permits that enable skilled foreigners to be employed in the United States, will be suspended for six months. Thousands of Indian nationals, particularly in the $150 billion Indian information technology industry, will likely be affected by the move.

Shares of prominent tech firms such as Wipro and Infosys took the expected beating. As they did in January, when a bill was introduced in the US House of Representatives to increase the minimum annual salary to qualify for an H1B visa from $60,000 (Rs 40 lakh) to at least $130,000 (Rs 87 lakh). Indian firms have long been accused of using H1Bs to hire Indian workers for less than it would cost to hire an American.

Each year, 85,000 H1B visas are made available, including 20,000 reserved for workers with advanced degrees. Except during downturns, such as in 2008, there are more applications than visas available, so employees and companies take their chances in a lottery. The suspension of the premium process, which permits firms to pay a $1,225 (Rs 82,000)

fee to expedite applications, is ostensibly to clear a backlog. Last year, Indian workers accounted for 70 per cent of the 85,000 available H1B visas, with Indian firms receiving 17,000 visas, or 20 per cent of the total.

In February, Narayana Murthy, co-founder of Infosys, called on Indian companies to not take the “soft option” and become “true multinational[s]” by hiring locals. US president Donald Trump’s campaign promises to protect American jobs had already made Indian firms jittery about potential legislation.

R. Chandrashekhar, president of Nasscom, lobbyists for the Indian IT industry, asserts that most commentary on the H1B issue operates from faulty premises. “There are three wrong notions,” he says, that need to be corrected. “First, Indian IT does not take away American jobs. In fact, Indian IT companies have created 155,000 jobs directly, and 411,000 jobs in support services, a number that grows at 10 per cent every year. Second, Indian IT companies provide services to 75 per cent of the Fortune 500, making American companies globally competitive. Third, the US government itself admits to a shortage of talent in STEM (Science, Technology, Engineering and Mathematics) areas.” The shortfall in talent for STEM jobs is estimated at 2.4 million people and, Chandrashekhar points out, “unemployment among STEM graduates is under 2 per cent”.

Still, the decision to suspend premium processing came on the heels of a US visit by the foreign secretary, S. Jaishankar, in which a “forceful presentation” on the H1B issue was apparently “met with a degree of understanding”. The message is clear—H1B reform is imminent. Indian IT companies, as Narayana Murthy has said, must now prepare for life without the imported, low-cost know-how that gave them their competitive advantage in the first place.