"Putting American Workers First," reads the
bold headline on the home page of the US Citizenship and Immigration Services,
proclaiming: "New Measures to Detect H-1B Visa Fraud and Abuse."
A click through to the April 3 statement outlines
steps the agency will take to clamp down on the use of temporary visas for
foreign workers in specialty occupations.
Among the areas of focus: "Employers petitioning for
H-1B workers who work off-site at another company or organisation’s
location."
Indian technology companies are in the cross hairs.
Outsourcing providers such as Tata Consultancy Services, Infosys and Wipro are
contracted by US firms and government agencies to deploy programmers and
engineers. This usually happens at the client's premises instead of
their own offices: that is, "offsite."
Indian nationals are so dominant in the H-1B program that
they accounted for 195 247, or 70.1 percent, of all beneficiaries in
2015.
Whatever the impact on these outsourcing companies, the
crackdown is already hurting the net worth of their billionaire founders as
investors anticipate tightened enforcement will hurt earnings, Bloomberg News
reported Wednesday. Tata Consultancy has lost about 3 percent since the US
administration announced on March 3 it would suspend premium processing of H-1B
visas, lagging a 2.8 percent advance in the benchmark Sensex index.
That needn't be the case.
Indian IT outsourcing companies got their start in the
late 1990s amid growing concern that the year 2000 would render computer
systems inert. Known as the millennium bug, the theory was that software would
fail when the last two digits in a system's clocks went from 99 to 00.
US organisations needed help going through millions of
lines of code to ensure they'd survive the deadly countdown, and Indian
companies with thousands of software technicians in cities like Bangalore were
there to help. Once that relationship had been forged, it was only natural for
US companies to extend their reliance as CEOs discovered how easy it was to
offshore mundane tasks to cheaper yet brilliant Indian teams.
India's IT sector employs around 4 million people. That
makes the almost 200 000 Indians on H1-B visas a drop in the ocean. While
there's a lot to be said for having staff at a client's office, so much
more is being done back home.
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Not being able to deploy directly would be an annoyance,
but it shouldn't cripple their businesses. Instead, if the Indian government
offers incentives to local and foreign firms to base more of their IT
engineers in the country - such as tax breaks, faster visa issuance for
foreigners and reduced red tape - there's reason to believe it could
spur a renaissance.
US companies are supposed to use H-1Bs to
hire talent they couldn't find locally. If they truly are reliant on
hundreds of thousands of Indian specialists, then they'd have many reasons to
set up teams in the country and send non-Indian staff there to help run
operations.
By leveraging Trump's visa crackdown, Indian Prime
Minister Narendra Modi could boost the nation's tech sector and create even
more jobs at home.
This column does
not necessarily reflect the opinion of Bloomberg LP and its owners.