Last week the US Senate passed an immigration reform Bill that is rightly being called historic, because it will put 11 million illegal immigrants already in the country on the path to citizenship, giving them the opportunity to go to work without fear of arrest or deportation. But the Bill also contains clauses relating to non-immigrant visas that will deal a body blow to Indian IT firms. By proposing to make H-1B and L-1 visas increasingly difficult and costly, the Bill as good as proposes to rob Indian IT companies of their competitive low-cost edge.

It proposes to implement a 50:50 clause by 2016, where no company can have more than half of its workforce on H-1B or L-1 visas. Even companies that have more than 15% of their workforce on temporary visas will have to pay much more for these visas and will also find themselves running against government checks of other kinds. All of this is clearly intended to bully companies into hiring more workers locally, at higher wages. Equally clearly all of this represents a regressive retreat from the processes of globalisation that the US itself spearheaded, where freer movements of people and businesses unlocked value addition across the world.

While this Bill makes its way through the House of Representatives, India has a window of opportunity to lobby against its most damaging provisions with full force. Because interrupting the 'global service delivery' model that Indian IT vendors have perfected will impact the competitiveness of their US clients too, we should tap into this support base as well to make our case. Protectionism is a lose-lose street for everyone. The US should not expect India to lower its trade barriers while shoring up its own barricades.

Source: Times of India