Secretary Kerry’s Visit – A Step Forward

The US Secretary of State, Mr John Kerry’s visit to India last week, has been positive for the IT industry and augurs well for the PM’s visit to the US later this year.
Secretary Kelly's Visit to India

While maintaining that the immigration bill was highly important from an American standpoint, he conceded that certain discriminatory clauses need to be changed. This is the first time, a high-ranking US official has acknowledged and endorsed the legitimacy of our concerns, which in itself is a step forward towards addressing a contentious issue,  that the industry has been grappling with for quite some time now.

Industry watchers have been on high alert since June last year, when the Immigration Bill was passed in the US Senate. Undeniably, Indian IT, which has invested in Billions in US, has played a significant role in growth of American businesses. Currently hovering at a shade over 100 Bn USD, bilateral trade between India and US is only expected to grow manifold in the next decade. However, stringent components of the Senate Immigration Bill 744- the outplacement clause for instance, could seriously upset this equilibrium and adversely impact relations between the two nations. Increased cost on visas and quantitative restrictions are all punitive measures which will force companies to cut down on number of people deployed in the US. This will make access to technology and on-site support in US more costly, which may force companies to move IT operations overseas. Surely, this will negatively impact growth, employment and revenue in US. The moot point that needs repeated emphasis is that the balancing cannot happen only through local hires. 10-year data suggests that less than 3 % of US college students graduate with a degree in Computer Science. By 2020 it is estimated that there will be one million more jobs created without any students graduating from requisite streams. Furthermore, H1-B visa holders are paid more than American workers with graduate degrees, which debunks the myth that skilled workers on visas have undercut salaries.

Not just Fortune 500 Companies but small enterprises and start-ups would be affected as well, if they are not able to have access to the best talent that is available in other parts of the world. In a digital economy, borderless movement of skilled manpower for specific projects is a business imperative, and legislators have to differentiate between such movement and immigration. Secretary Kerry’s timely visit puts things in a better perspective. Due to impending elections in US later this year, it is unlikely that the bill will get passed in the House of Representatives any time soon. That is a generally held view, which gives us a little more breathing space. While not letting complacency set in, we will continue to work with legislatures, administration & lobbying bodies in the US, to create greater awareness and high light our concerns as well as aspects that should be of equal or greater concern to the US as well.

The PM’s visit to US to meet President Obama is an excellent opportunity to address issues relating to bilateral trade including free movement of business/skilled professionals between the two countries. It has indeed been encouraging to see the recent steps taken by US administration to build partnership between the two nations.

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