Business Impact

U.S. Senators' letters to Indian companies on visas revives fears of outsourcing backlash

NEW DELHI (AP) –Letters from two U.S. senators seeking details of high-tech work visas used by India’s top software services companies have prompted concern among Indian officials about a possible backlash against outsourcing.

Senator Chuck Grassley, a Republican, and Dick Durbin, a Democrat, said Tuesday they are focusing on nine India-based companies that last year used nearly 20,000 H-1B visas.

The visas, for high-skilled workers and are heavily used in the high-tech industry, are mostly used by Indian software firms that operate large centers in the U.S. to handle jobs outsourced from American companies.

Indian Commerce Minister Kamal Nath warned that the move, which appeared to counter a proposal pending with the U.S. Senate to increase the current 65,000 cap on H-1B visas, could hurt ongoing global negotiations to further liberalize trade in services.

”I am surprised both with the form and the content of the letter,” Indian Commerce Minister Kamal Nath said in a statement released late Wednesday. ”Issues such as work visas are intergovernmental in nature and should be dealt with accordingly.”

The letters from Grassley and Durbin, both members of the Senate Judiciary Committee’s immigration subcommittee, asked the companies several questions about their visa use, wages and layoffs.

”I continue to hear how people want to increase the number of H-1B visas that are available to companies,” Grassley said in a news release Tuesday. ”Considering the high amount of fraud and abuse in the visa program, we need to take a good, hard look at the employers who are using H-1B visas and how they are using them.”

The letters, posted on Grassley’s Web site, were addressed to Infosys Technologies Ltd., Wipro Ltd., Tata Consultancy Services Ltd., Saytam Computer Services Ltd., Patni Computer Systems, Larsen & Toubro Infotech Ltd., I-Flex Solutions Ltd., Tech Mahindra Ltd., and Mphasis Corp.

The U.S.-India Business Council –a grouping of top Indian and American businesses based in Washington –described the inquiries as ”unusual” and alerted its member companies against a possible backlash to outsourcing, as was seen during the 2004 U.S. presidential elections.

The council has also been ”monitoring the recent explosion of legislation at the state level that would constrain outsourcing in varying ways,” it said in a statement.

It asked member companies to revive the work they had done in 2004 to ”educate Americans about the vital importance of being able to source talented work and services wherever they can be produced most efficiently, thereby enabling U.S. companies to remain competitive.”

Infosys Technologies, the country’s second largest software company, said it is ”studying the issue.” Wipro Ltd., third-largest, said it has yet to receive the letter.

Nath said he planned to raise the issue with U.S. Trade Representative Susan Schwab when he meets her in Geneva later Thursday.

”Temporary movement of skilled professionals is an essential component of the global services economy and bears no relation to immigration issues,” Nath said. ”At this juncture, we would be extremely concerned if there are efforts to circumscribe the existing levels of liberalization in this area in the United States.”

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