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US to assess impact of visa hike

By Lalit K Jha in Washington
August 31, 2010 10:49 IST

The United States is in discussion with India trying to understand the potential impact of the increase in fee of categories of H-1B and L1 visas on Indian companies.

"We have been explaining to the Indian government the specifics in the legislation, and trying to understand the potential impact on Indian companies," State Department spokesman P J Crowley said.

But beyond that, he said, he was not sure that there was any particular next step. After the Border Security Bill was passed by the Congress and signed into Law by US President Barack Obama, India has expressed its concern over the new legislation would mainly impact the Indian companies as it allows increase in fee of categories of H-1B and L1 visas on them to raises more than $550 million of the $650 million required in the bill to enhance the security of the US-Mexico border.

Meanwhile, writing for a blog on The Wall Street Journal, Rupa Subramanya Dehejia, who writes on the political economy-based out of Mumbai, said the increase in visa fee would only help politicians.

"All said and done, if you look at the equation, the Indian IT industry will have to fork out a few million dollars, but that is the cost of doing business in an increasingly protectionist environment. So, while the Senator may score a marginal political victory and the US.

"Treasury will make a few bucks out of this, the Indian IT industry will continue to prosper for the foreseeable future and come out ahead despite the legislation," Dehejia said.

"If the Senator really wanted to eliminate or make it more difficult to bring Indian engineers over, he would have suggested drastically curtailing the quota to say 20,000 workers a year. But everyone including the senator knows that this would have disastrous consequences to the US economy," she said.

"Those positions would simply be outsourced or the companies would move their operations offshore. In either case, they will circumvent US jurisdiction and lead to job losses in the US," she said. Notably, India has called the fees discriminatory.

Lalit K Jha in Washington
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