Indian information technology firms say border security bill is protectionist

By Rama Lakshmi
Washington Post staff writer
Friday, August 6, 2010; 2:45 PM

NEW DELHI -- Representatives of India's booming information technology industry said Friday that a border security bill passed by the U.S. Senate would promote protectionism and flout international trade practices.

The bill, approved Thursday by the Senate, calls for boosting surveillance along the U.S.-Mexico border by deploying more enforcement agents and aerial drones. The House could take up the measure next week.

Indian technology executives are rattled that the $600 million funding for the additional measures proposed in the bill, introduced by Democratic Sens. Charles E. Schumer (N.Y.) and Claire McCaskill (Mo.), would be raised by increasing the visa application fees of companies that employ 50 or more non-immigrant, skilled foreign employees.

This would affect companies that bring into the United States highly skilled workers under "H-1B" visas or "L" visas. The proposal would hit Indian IT-outsourcing companies that send thousands of workers to the United States to work on short-term projects that extend from three months to three years. For long-term projects, Indian companies hire locally within the United States.

Schumer and McCaskill say the bill would improve border security without adding to the deficit. "America must do a better job of securing our borders. This bill will help in a big way," McCaskill said in a statement following its Senate passage.

(Coverage of President Obama's border security plan.)

McCaskill said in the statement that the fees would affect only a "handful a handful of foreign corporations that exploit U.S. visa programs." But the Indian IT industry says it could have a significant effect.

"We do understand that the U.S. needs to secure its borders. But the notion that Indian IT companies should pay for sealing their border with Mexico is incongruent," said Som Mittal, the president of the National Association of Software and Services Companies (NASSCOM) in New Delhi. "This is a populist measure that is protectionist and discriminatory and is not compliant with the practices of the World Trade Organization."

He said that mixing trade and immigration issues is a mistake. "You are running on thin ice if you curb trade to talk about immigration," he said.

In the past decade, strategic and commercial relations between India and the United States have deepened, and President Obama is likely to visit India this year.

"We were all awaiting President Obama's visit eagerly. But this move is a big dampener on the ties and the upcoming visit," Mittal said. "Let us hope that there are no retaliatory measures from the Indian side."

(The U.S.-India "strategic dialogue.")

The booming IT services industry has contributed a big chunk to India's impressive economic growth in recent years. Industry representatives say the new law is likely to impose an additional expense of more than $200 million annually. Last year, out of the 121,000 H-1B visas issued by the United States, Indian companies got 12,000 visas.

A statement issued by NASSCOM said, "Indian companies only take a fraction of the total H-1B visas and U.S. companies, who also use these visas in large numbers, will remain unaffected by this bill, thus unfairly reducing the competitiveness of Indian firms."

The bill, which affects renewals and transfers as well as new visa applications, was passed quickly by the Senate just before senators left for the August recess.

"On one hand, the U.S. says it wants to attract the world's best and the brightest talent. But every signal they have given in the last year is negative," Mittal said.

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