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Indian IT pins hope on US House of Representatives

June 29, 2013 08:14 IST

With the passage of the Comprehensive Immigration Reforms Bill by the US Senate, the Indian information technology (IT) outsourcing services industry is now pinning its hope on the House of Representatives, which has prepared its own version of the Bill.

Indian IT pins hope on US House of Representatives. Photograph: Gary Cameron/ReutersThe House is expected to propose its own version of the Bill that does not have restrictions that have negative impact on both US corporations and Indian companies. According to industry insiders, in case the House decides to stick to its own Bill, they would have to find out a middle path.

“I think it is too early to make a judgment. The House, which is dominated by Republicans, is preparing its own version of the bill which does not have any punitive provision. When the provisions of the two bills are different, they would have to find out a middle path, follow the process all over again,” said Krishnakumar Natarajan, chief executive officer (CEO) and co-founder of midsize IT services company, Mindtree.

“It is absolutely clear the Senate Bill in its current form will not see the light of the day,” he added.

IT industry body Nasscom said it is quite hopeful the final contour of the bill would be much more balanced than it is at present.

“We are working on the House side, where the bill language is a less harmful to global companies and the US customers and are confident we would have a more balanced bill in the House,”

said Som Mittal, president of Nasscom.

The Senate Bill, in its current form, is expected to limit the ability of global IT companies (including Indian) to send employees to the US to service clients. The bill is expected to make it harder and costlier for Indian tech firms to use H-1B workers in their US operations.

“The immigration bill has to go through multiple stages. The first stage has been cleared. The whole version of the bill has not been released. The bill has implications for us, but we will have to wait for its final version before we make a comment,” said N Chandrasekaran, CEO & managing director of TCS, India’s largest IT services company.

According to the Senate Bill, if an employer has more than 50 per cent of their employees on H-1B or L-1 visas, they would be required to pay $10,000 fee per additional worker. So, it is expected to affect most of the large Indian IT services companies including TCS, Infosys and Wipro.

Nasscom has said provisions of the senate Bill have arbitrarily singled out a group of multinational IT companies which amount to punitive treatment of this industry.

“This fails to recognise the vital services global IT services companies deliver; the innovation and competitiveness they have spurred in thousands of US businesses, and the investments these global IT services companies make in the US,” said Mittal.

BS Reporters in Bangalore/ New Delhi/ Mumbai