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Lobbying the Hill, softly

How Indian IT sector must counter US immigration Bill

Business Standard  |  New Delhi 

The Indian information technology industry is exercised about several aspects of a new US immigration Bill. Nasscom, the industry lobbyist, says it does not like the issue of skilled workers travelling to the US for short periods getting tagged on to the larger debate in the US over immigration. It feels strongly that restrictions on the use of such workers discriminate against India-based firms. Government-imposed costs on firms per worker will differ depending on what percentage of their workforce is based in the US. Thus, an IBM will have a cost advantage over not just a TCS when it comes to bringing over its own workers from India, but also a Cognizant - a US firm with large development centres in India. In particular, Nasscom finds the provision that a work visa holder not be allowed to work at the site of the client "draconian".

This Bill will be extensively debated by the US Congress, take considerable time to become law and, in all likelihood, will get to have a far different final shape from the present version. Hence there is scope for extensive lobbying in Washington. Countries such as South Korea, Ireland, Poland and Canada do so not only to fight negative aspects but also to help write in specific provisions beneficial to themselves. In this business, South Korea last year spent close to $2 million. It is worth the Indian industry's while to similarly invest since the stakes are high - targeting close to $50 billion in US exports in 2013-14. It is also noteworthy that while lobbying, these countries prefer to stay under the radar.

Industry advocates should have a more realistic and current view of the business. Yes, the Indian IT industry began in the 1990s during the Y2K phase with the "body shopping" model, wherein a firm, like an employment agency, supplied skilled workers to the US. After the early 2000s, the industry progressed by developing the offshore distributed development model, which coincided with the rise of large development centres in India. The next phase involved enterprise solutions and, most recently, platforms to deliver new technologies such as cloud computing. Simultaneously, Indian firms matured and needed to be near the client's senior management; US public also changed, following high local unemployment - and so some Indian companies shifted to "near-shore" models that make for a bigger and better-paid regular workforce in the US. You do need some skilled workers at the client's site during the implementation of a project, but they hardly carry the can for the current Indian industry. What IT really needs to do is work with both governments to ensure that US goods and investment are allowed greater access to India in return for greater access to the US for Indian services.

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First Published: Mon, May 13 2013. 21:39 IST