Immigration Reform 2013 News: Bill May Help Indian Outsourcing Companies

01 Jun 2013

There are more Immigration Reform 2013 news and updates coming out. Reports suggest that the Bill may help Indian outsourcing companies

The US Immigration Reform Bill could provide a major platform particularly to the India-heritage firms to increase their investment and strengthen their presence in the U.S. market following its implementation, according to the Information Services Group, technology insights, market intelligence and advisory services company.

It is pertinent to mention here that H1-B and L-1 Visa Reform Act of 2013, a component of the Comprehensive Immigration Reform Act of 2013 , that has proposed by Senator Chuck Grassley, proposes to deny skilled foreign worker visas to international firms operating in the US. The Bill aims to deny visas to firms with more than 50 employees and that have 50 per cent or more employees already on this kind of visa. While the bill will ease the US firms by increasing the annual cap on the Visas, it would pose a great difficulty for the Indian firms to bring in cheap labor resources on temporary visas.

Talking about the analysis, Sid Pai, Partner and President, ISG Asia Pacific, said: “Over the short term, the legislation would likely have a negative impact on Indian-heritage IT companies and give a competitive edge to U.S. firms. Over the long term, however, the provisions could encourage Indian firms to expand their U.S. presence. Specifically, to avoid the provisions of the bill, Indian companies may step up local hiring and focus on acquisitions of U.S.-based companies.”

It may be noted that the bill that is proposed and strongly backed by Senators Dick Durbin and Chuck Grassley and being massively supported by the U.S. service providers and businesses even as the Indian-heritage firms and the Indian government have lodged an objection against it terming it to be rather protectionist.

The key proposals that are part of the act maintains that a requirement that, to be eligible for H1-B visas, a firm must employ local hires for at least 25 percent of its workforce, progressively increasing to 50 percent (according to industry estimates, between 50 and 80percent of U.S.-based employees of Indian-heritage companies are on H1-B or L1 visas). Also, the act has suggested higher fees for H1-B visa applications along with an increase in the cap on the number of H1-B visas to 110,000 from the current 65,000.

“If passed, this legislation could provide the impetus the Indian IT companies need to tweak their existing business models and become more global. It could therefore have the unintended consequence of making the Indian-heritage firms stronger competitors in the U.S. market. A few years ago, ISG observed that many U.S. firms with lagging offshore capabilities responded by aggressively increasing local hiring in India or by making large acquisitions there. Paradoxically, some of these firms – while still maintaining sizable U.S. employee populations – are now larger employers in India than they are in their home country.” Pai said.

Source: http://nvonews.com/2013/05/31/immigration-reform-2013-news-bill-may-help-indian-outsourcing-companies/