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Indian outsourcers in U.S. Congress firing line again

Narayan Lakshman

WASHINGTON: Major Indian IT companies again found themselves in the crosshairs of Congressional ire in the United States this week, as witnesses testifying in a House of Representatives hearing on immigration policy enforcement lambasted the use of the H1-B visa as a convenient route for outsourcing American jobs to India.

Speaking before the House Subcommittee on Immigration Policy and Enforcement, Ronil Hira, a professor at the Rochester Institute of Technology, said: “For at least the past five years nearly all of the employers receiving the most H-1B are using them to offshore tens of thousands of high-wage, high-skilled American jobs.”

Mr. Hira added that the offshore outsourcing industry was adding “hundreds of thousands of jobs every year,” and the top three India-based offshore outsourcing firms — Tata Consultancy Services, Infosys, and Wipro — added a “stunning” 57,000 net new employees last year alone.


In his testimony to the Subcommittee headed by Congressman Lamar Smith, Repubican of Texas, Mr. Hira further argued that, “If the H-1B programme loopholes were closed, many of those jobs would have gone to Americans.”

The latest debate revives the spectre of a strong anti-outsourcing sentiment in the U.S. that saw, during the worst of the economic downturn last year, laws passed making it more expensive for Indian companies to obtain visas for their U.S.-based employees.

That bill, which drew upon support from Senator Charles Schumer, caused significant consternation in Indian corporate houses that were seeking to expand their U.S. operations.

Post-Obama visit

However, since U.S. President Barack Obama's visit to India in November, bilateral commercial transactions were again viewed in a positive light, with the President himself mentioning the job-creating benefits of U.S. economic engagement with India.

Yet, in Thursday's hearing in the House, Mr. Hira presented evidence showing that for the fiscal years 2007 to 2009, seven of the top 10 H-1B employers were “doing significant offshoring,” and such offshoring through the H-1B programme was “so common that it has been dubbed the “outsourcing visa” by India's former Commerce Minister.”

According to the statistics Mr. Hira supplied, Infosys, Satyam and Wipro jointly obtained over 30,000 H1-B visas during the period and other “significant offshoring” companies including Tata, Cognizant, IBM and Accenture jointly obtained nearly 7,000 visas.


Setting the tone for the hearings in his remarks, Congressman Smith said, “The H-1B program has safeguards built into it to protect the interests of American workers. It is a subject of great dispute as to whether those safeguards are sufficient.”

Mr. Smith went on to argue that the U.S. Government Accountability Office recently found that H-1B employers categorise over half of their H-1B workers as entry level — which is defined as “perform[ing] routine tasks that require limited, if any exercise of judgment” — and only 6 percent as fully competent.

“Are all these entry level workers really the best and the brightest?” Mr. Smith asked.

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