Indian vendors reply to U.S. senators’ H1-B inquiry

Putting new restrictions on H1-B visas in the United States would be a barrier to trade, the president of a large Indian trade association said Wednesday. The remarks come in response to an inquiry by two U.S. senators into alleged misuse of the visas.

Trade between the United States and India is two-way, and U.S. companies such as Dell, Microsoft, Oracle, and Hewlett-Packard are benefiting from higher sales of computers and software to India’s IT industry, according to India’s NASSCOM (National Association of Software and Service Companies). NASSCOM made public on Wednesday contents of a letter about the issue, which it sent to U.S. Senators Chuck Grassley and Richard Durbin, who are investigating the alleged misuse of H1-B visas.

It appears that companies are using H1-B visas to displace qualified, American workers, Grassley said in a statement earlier this month. New provisions proposed by the senators to ensure that H1-B visas are being used to meet a worker shortage and not to replace U.S. workers have been included in a bipartisan compromise immigration bill currently before the U.S. Senate.

Grassley, a Republican senator from Iowa, and Durbin, a Democratic senator from Illinois, earlier this month wrote to nine Indian companies, asking them for details on their use of the H1-B visas. NASSCOM said it had sent letters on behalf of the nine Indian companies to the senators.

The nine companies together account for close to 20,000 H1-B visas, the senators said on their Web sites. Among the companies that received these letters were India’s top outsourcers Tata Consultancy Services, Infosys, and Wipro.

NASSCOM considers the issue of work permits such as the H1-B visas and intracompany transfers from India to the United States as a trade issue that should not be confused with immigration issues.

“We want to avoid this being confused as an immigration issue, particularly because it has come up in an immigration bill,” NASSCOM’s president Kiran Karnik said.

India’s minister for commerce and industry, Kamal Nath, has also warned of repercussions on ongoing World Trade Organization negotiations if there were any attempts to restrict H1-B visas.

NASSCOM particularly objects to a clause in the immigration bill that prohibits companies from hiring H1-B employees if they employ more than 50 people and more than 50 percent of their employees are H1-B visa holders.

This prohibition will affect the U.S. operations of Indian outsourcing companies as often they have to take staff from India to work on clients’ projects, according to Karnik. These workers are in the United States on H1-B visas because they have the knowledge and experience to handle clients’ requirements, Karnik said. It is also difficult for Indian companies to hire technical staff in the United States because of a tight labor market, he added.

Taking staff from India on H1-B visas is not a way to get cheap labor, according to Karnik. The rules of the H1-B visa program allow H1-B visa holders to change jobs within the United States, and market forces ensure that wages cannot be artificially suppressed, he added.

The H1-B visa is an employer-sponsored, nonimmigrant work visa for a foreign worker coming temporarily to the United States to perform services in a specialty occupation. Indian outsourcing companies depend on these visas, as a significant proportion of their staff work at client locations in the United States. NASSCOM and some U.S. technology companies have asked for an increase in the current H1-B visa cap, which limits the number of visas annually to 65,000.

In its letter to the senators, NASSCOM also mentioned that the largest outsourcing contracts from the Indian private sector, as also from the Indian government, have gone to U.S. companies. It said Indian students now form the biggest group of foreign nationals studying in U.S. universities, spending an estimated $3 billion a year. India is a major buyer of a whole host of U.S. goods and services, including aircraft, wheat, branded garments, and accessories, and the rapidly growing Indian economy is importing ever-larger quantities of these goods and services, NASSCOM said.