Provisions of Immigration bill self-defeating for US: Arvind Subramanian

Certain provisions of the current immigration reforms bill, in particular those related to the H-1B visas, are self-defeating for the United States, a top Indian economist has said.

The immigration bill, from the US point of view, is going to bring in much more talent to the US, which is desirable aid, said economist Arvind Subramanian.

"But I think it also has a number of restrictive elements which are not so good for the US, because it's like imposing a tax on chips. That's what imposing restrictions on skilled labour coming into the US," he told Senators during a Congressional hearing on Indian economic conditions.

Noting that the H-1B visas generates a lot of revenue for Indian nationals, Subramanian said it is a symbol of cooperation but also people-to-people cooperation.

"I think it's really important to going forward to get this bill right as kind of sending a signal that this is a really important relationship," he said.

"I would say that the Indian economy has to recover, has to gain back its strength. And once that happens, I think we can move into a new phase where the economic relationship can blossom more.

"At that stage, I think we do need to be thinking about something much more ongoing, substantive, and big, moving beyond a BIT," he said.

However, a senior Administration official defended the immigration bill arguing that Indians have been the greatest beneficiary of the H-1B visa program.

The bill aims to address the misuse of the popular work visa regime by illegal emigrants. The Indian side has been arguing that Indian IT professionals are temporary workers and not emigrants.

The proposed law says all companies with 50% or more employees from outside the US will have to pay a higher visa fee of $10,000 per worker. At present, the fee is $4,500, and it used to be $2,000 for H-1B and L1 visas till 2010.

The proposed legislation is expected to kick in early next year.