echarcha
September 23rd, 2003, 06:57 PM
More bad news folks :( Reduction in H1B visa is going to hit Indian IT sector :(
Indian IT will be hard hit: Nasscom
NEW DELHI: India's dollar-spinning software industry may take a hit in the years ahead by an impending cut in the number of H1-B visas issued by the US for skilled workers, a premier IT lobby group said on Tuesday.
"We are not really worried about its impact on the Indian industry in the short-term. But if the level of 65,000 is maintained for a long time, it will have a fallout,” said Kiran Karnik, president of the National Association of Software and Service Companies (Nasscom).
"The impact may be felt after two to three years," he told media persons here.
Beginning October 1, the number of H1-B visas issued, which currently stands at 195,000 a year, is likely to be reduced to 65,000 a year unless the US Congress addresses the issue by September 30.
Almost 50 per cent of the H1-B visas issued worldwide last year by the US went to Indian professionals. India is also currently the second largest source, after Mexico, of legal immigrants for the US.
"Legislation has to be introduced and passed by the US Congress by September 30 if the level of 195,000 H1-B visas is to be maintained. Otherwise the cap will revert to 65,000," said Karnik.
"There is a possibility that the level of 195,000 would be retained. Last year the legislation was introduced and passed just a few days before the expiry of the deadline. It may happen this year also.
"But if it doesn't happen, then I think the level of 65,000 may be too low for market forces to operate."
The proposal to cut H1-B visas comes at a time of slump in the US economy and unemployment, resulting in an outcry against job losses in the local market and tech jobs being shipped abroad, particularly to India, via outsourcing.
The H1-B visa category was created in 1952 to provide the US economy with technically skilled foreign workers.
Currently, there are some estimated 900,000 H1-B employees in the US, 35-45 per cent of whom are from India, according to the American Immigration Lawyers Association.
Karnik said employers in the US currently need and would continue to need H1-B workers.
"The H1-B visa programme has been very useful for the US companies. It's an issue for US industry to take up. By reducing the cap from 195,000 to 65,000 you are artificially suppressing the market forces," he said.
The Nasscom chief said the Indian IT industry would be comfortable with the level of at least 120,000 for H1-B visas.
Karnik said the delay in processing of visas to the US is also creating problems for the local software companies. "We are more worried about the delay in processing of visas than a cut in the number of visas issued by the US.
"Earlier, visas for technology professionals used to be cleared in two to three weeks but now the process gets delayed by two to three months. Such long delay causes uncertainty."
The US is the prime export destination of the Indian software industry, whose export revenues increased from $164 million in 1991 to around $10 billion in 2002, representing a compounded annual growth rate of 45 per cent.
Source (http://timesofindia.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=197857)
Indian IT will be hard hit: Nasscom
NEW DELHI: India's dollar-spinning software industry may take a hit in the years ahead by an impending cut in the number of H1-B visas issued by the US for skilled workers, a premier IT lobby group said on Tuesday.
"We are not really worried about its impact on the Indian industry in the short-term. But if the level of 65,000 is maintained for a long time, it will have a fallout,” said Kiran Karnik, president of the National Association of Software and Service Companies (Nasscom).
"The impact may be felt after two to three years," he told media persons here.
Beginning October 1, the number of H1-B visas issued, which currently stands at 195,000 a year, is likely to be reduced to 65,000 a year unless the US Congress addresses the issue by September 30.
Almost 50 per cent of the H1-B visas issued worldwide last year by the US went to Indian professionals. India is also currently the second largest source, after Mexico, of legal immigrants for the US.
"Legislation has to be introduced and passed by the US Congress by September 30 if the level of 195,000 H1-B visas is to be maintained. Otherwise the cap will revert to 65,000," said Karnik.
"There is a possibility that the level of 195,000 would be retained. Last year the legislation was introduced and passed just a few days before the expiry of the deadline. It may happen this year also.
"But if it doesn't happen, then I think the level of 65,000 may be too low for market forces to operate."
The proposal to cut H1-B visas comes at a time of slump in the US economy and unemployment, resulting in an outcry against job losses in the local market and tech jobs being shipped abroad, particularly to India, via outsourcing.
The H1-B visa category was created in 1952 to provide the US economy with technically skilled foreign workers.
Currently, there are some estimated 900,000 H1-B employees in the US, 35-45 per cent of whom are from India, according to the American Immigration Lawyers Association.
Karnik said employers in the US currently need and would continue to need H1-B workers.
"The H1-B visa programme has been very useful for the US companies. It's an issue for US industry to take up. By reducing the cap from 195,000 to 65,000 you are artificially suppressing the market forces," he said.
The Nasscom chief said the Indian IT industry would be comfortable with the level of at least 120,000 for H1-B visas.
Karnik said the delay in processing of visas to the US is also creating problems for the local software companies. "We are more worried about the delay in processing of visas than a cut in the number of visas issued by the US.
"Earlier, visas for technology professionals used to be cleared in two to three weeks but now the process gets delayed by two to three months. Such long delay causes uncertainty."
The US is the prime export destination of the Indian software industry, whose export revenues increased from $164 million in 1991 to around $10 billion in 2002, representing a compounded annual growth rate of 45 per cent.
Source (http://timesofindia.indiatimes.com/cms.dll/html/uncomp/articleshow?msid=197857)