The US president Barack Obama has had his way with the Senate on his immigration policy, as it passed a new immigration bill, which is a body blow to Indian IT companies such as TCS, Infosys, Wipro etc.
The landmark bill, which seeks to restrict immigration especially in the technology field, has another hurdle to become a law as it has to be passed by the house of representatives too, which is considering its own set of immigration bills that are different from the Senate version. But even this has nothing to offer for Indian IT companies. The bill will badly hit the Indian IT firms using the guest worker visa (H1-B programme) to win US contracts as it legislates higher fees and salaries, blunting their low-cost edge. The bill will also pave way for fast-track permanent residency (green card) for foreign students who graduate in science, technology, engineering, and maths.
Washington is also gradually setting up other barriers against transfer of capital and knowledge, undermining the long-held argument in New Delhi that brain drain has its benefits for India. The two houses have to reconcile their differences before the bill goes to the President for assent to become law. The interregnum, which could range from a few weeks to a few months, provides a window of opportunity for Indian lobbies to press their case and have at least some of the provisions that will affect India adversely removed or diluted. Not that India is the focus of discrimination here, although it will be the worst sufferer because its service economy is now so tied to America.
The Senate bill actually increases the H1-B visa cap from the current 85,000 to 195,000, but to placate opponents of the guest worker programme, the bill has provisions to penalize companies that are primarily dependent on these visas, which happen to be Infosys, Wipro, TCS etc. US lawmakers have attempted to shield the American economy and its job creation by shutting the doors on from low-cost competition from them, while opening the doors to some 11 million illegal immigrants mostly of Hispanic stock who constitute a huge vote block. At least with regards to vote bank politics, Indian clout and numbers are negligible.
But there are also US companies that will be adversely affected by the squeeze that will be felt by Indian firms. The Senate bill unfairly targets American companies trying to remain globally competitive by reducing their ability to contract with global IT service providers and restricting their access to the international expertise they need. All eyes now turn towards house speaker John Boehner, who has indicated that the Republican-controlled chamber will not be pressured by the Senate bill and will craft its own versions. The political stakes here are immense.
Some Republican lawmakers fear that if the bill that turns 11 million illegal immigrants (mostly Hispanic) into citizens goes through, they will be swept out in future elections because the new voters will be mostly Democratic. Others worry that if they don’t back bill, they will still suffer from backlash from those who have already become citizens. India and its concerns are rather marginal in
this epic debate.
