The impact of H-1B visa fee hike on Indian outsourcing industry

August 23, 2010

The recent US decision to hike H-1B visa fee is blatantly discriminatory and this is some thing on which both the Indian outsourcing industry and government hold the same view. Not only is it seen as a retrograde move likely to have a negative impact on Indian outsourcing industry, but also as one that will do more harm to US interests than good. Also there is a growing feeling in India that every time Obama’s ratings plunge on account of economy issues, or there is an election around the corner the administration turns its guns on the Indian IT industry, blaming it for loss of jobs. This is reminiscent of the way the US used to be blamed by left leaning politicians of India some years back for everything ranging from inflation to drought.

Though there has been shrill rhetoric on this subject for some years in the past, this is the first time that a concrete piece of action has been taken, and this has been received quite badly in India. That the Indian government thinks along the same lines as the industry has been borne out by the fact that it is seriously considering referring the matter to WTO under the grounds of discrimination. In contrast the European Union has been more accommodating with regard to work permits for software professionals.

The fact that the Obama administration chose to ignore the official protest to US Trade Representative and chose to go ahead with signing of the law rankles with the Indian government. This now forms the backdrop of the presidential visit later this year. Considering that both India and the US are committed to a long term strategic partnership, this sure will be a major irritant.

The US which has built its enormous success by attracting the best talent in the world by giving them the world, today sees a situation where not even 50% of the 65000 visas available under the H-1B visa regime have been availed of. Compare this with two years ago when this number was over subscribed in a matter of two days and computer lots had to be drawn to pick successful applicant. On the one hand the US president talks of maintaining leadership over the emerging economies of the world, and on the other hand laws are passed which chip away at the very factors which contributed to America’s rise.

The US has an employment crisis on its hands brought about by a host of factors including poor fiscal decision in the past, and it has to do everything it can to correct the situation. The last thing that it can and should do is to take decisions which are short term, and ultimately hurt its interests, rather than promote them. Emerging economies like India need to be taken along in their endeavours to revive their economy. This is particularly true in today’s globally inter-woven economy. The days of isolationism and do it alone are truly over. Let’s hope that this issue gets amicably resolved in everybody’s best interests.


2 Responses to “The impact of H-1B visa fee hike on Indian outsourcing industry”

  1. Vincenzo on August 23rd, 2010 7:53 pm

    Like the Indians tell the Americans when the Americans complain about being discriminated against by employers when bypassed for cheap Indian labor – “Stop whining and learn how to compete!”

  2. MicroSourcing on September 20th, 2010 3:11 am

    Globalization has its effects, both bad and good. One way of looking at outsourcing is that it gives US laborers the incentive to prove themselves better than their foreign counterparts, and that they’re worth every penny.

Got something to say?