In the first-ever indication of its stand on H-1B visas popular among Indian professionals, the Obama Administration has informed a court that the US needs this scheme to avoid "competitive disadvantage" the American companies could face otherwise.

A submission in this regard was recently filed by Michael F Hertz, Acting Assistant Attorney General, in response to a lawsuit filed by a group of three US bodies, nine individuals and two students challenging government's decision to extend from one year to 29 months the duration of foreign nationals with engineering, science and other technical degrees who can work in the US on student visas.

This was a policy decision by previous Bush government, which was challenged in a lower court in New Jersey last year and was summarily dismissed. The same petitioners approached the Third Circuit Court of Appeals in Philadelphia last month.

The Obama Administration's view point was expressed in its submission before the Philadelphia court on March 23, according to a copy of petition and response obtained by PTI.

"The inability of US employers, particularly in the fields of science, technology, engineering and mathematics, to obtain H-1B status for highly skilled foreign students and foreign non-immigrant workers has adversely affected the ability of US employers to recruit and retain skilled workers and creates a competitive disadvantage for US companies," the US government argued.

Defending the policy of the Bush Administration on extension of work permit to foreign students with degrees in science, technology, engineering and mathematics (STEM) by 17 months, the new government argued that this is necessary to retain these foreign students in America.

Otherwise, it said, they would have no other option but to return or go to other countries for employment. With there being great rush for H-1B visas, extension of work permit to those holding F-1 (student visa) is a justifiable way to retain this talent, it argued.

The extension of time simply allows these students to avoid the hardship of leaving the country to change their status and gives the employers ample time to file H-1B petitions on their behalf in due course.

The acting Assistant Attorney General noted that had the government not extended the work permit of foreign students in STEM category, some 10,000 students holding H-1B visas for the fiscal 2009 would have had to leave the country within 60 days as required by law or extend their F-1 status by enrolling in another course of study.

"As indicated in the IFR (Interim Final Rule) there is an important economic interest for the United States in keeping STEM graduates from going to other countries that are providing increased opportunities to these students," the US government said in its petition.

"The IFR would help attract STEM students to the United States. Otherwise, United States will lose skilled technical workers in great need by high-tech industries."