News Hour- IT companies Infosys, TCS feel the pinch as US holds back L-1 visas

BANGALORE: For the first time in many years, the number of short-term US visas given to Indian professionals has declined, giving credence to complaints that America is making it difficult for software companies such as Infosys and Tata Consultancy Services to send employees to their biggest market. 
Approvals for L-1 visas, on which Indian software companies rely to send their most skilled professionals on assignments to the United States, were 28% lower at 25,898 in 2011, data from an independent public policy think tank based in the US show. On the other hand, such visa approvals rose by 15% for applicants from the rest of the world, leading to concerns that India is singled out for attention.
"This shows an enormous gap in visas issued as well as approval/denial rates between posts in India and the rest of the world, raising policy questions as to whether this great disparity is the result of a conscious policy at US posts in India," the National Foundation for American Policy wrote in its report.
Among the advisory members of the foundation is Columbia University economist Jagdish N Bhagwati, an advocate of global free trade. Most people in the software industry believe there is a deliberate policy of discrimination against Indians but they are wary of voicing their opinion publicly for fear of antagonising the American government.
Som Mittal, the president of software industry lobby Nasscom, said even American companies such as IBM and Accenture have been affected because the high rejection rates prevent many of their Indiabased staff from travelling to the United States.
"For us, it adds to our uncertainty and costs," he observed. 

40% of Work Permits Under L1 
About 25,000-35,000 Indians travel to the US every year to work on assignments for software companies. Up to 40% of work permits are usually under the L1 category meant for professionals with specialised skills such as project management. 
India's $70-billion IT services sector is facing increased scrutiny from US immigration officials and other federal authorities, especially after an American employee of Infosys accused the company of abusing short-term work permits issued under B1 visa category to do software code writing. 
The US has also doubled visa fees under the H1 and L1 categories that most Indian companies use. The Indian government has been urging the US, which accounts for more than half of Indian IT exports, to ease up on visa rejections but it does not appear to be making much headway. 
"The release of the L1 visa data makes it difficult for US government officials to argue that nothing different is going on in India," the foundation wrote. The US State Department has been denying that anything is amiss with L1 visa approvals in India because the country gets the lion's share of such work permits. However, the foundation termed that line of argument "questionable". 
"The fact that India has a large and growing pool of skilled professionals tells us nothing about whether when employers apply for L1 visas, the individual cases of such professionals are decided properly." Already facing an uncertain economic environment, companies such as TCS, Infosys and Wipro are now being forced to adopt technologies such as telepresence to compensate for the presence of an expert at the customer's site.

For Indian technology companies competing for contracts in the US, every visa denial counts, and can mean loss of business. An executive at a mid-sized company cited the example of a million-dollar short-term project which it lost to a local competitor because it was not able to get its employee an L1 visa. The rival got the job done through an Indian expert based in the UK.
Eshan Joshi, a former head of employee compensation and immigration at Infosys, said the US needs to create a new category of visas for services to bring clarity and also meet special needs of the technology sector. The increasing complexity around work permits causes short-term hiccups for technology services vendors scrambling to back critical projects with their best talent, said Joshi, who is now an independent human resources consultant. "It makes executing projects very difficult, but not a fatal issue for business in the long term. Companies need to reduce dependence on such work permits."

(Source- http://economictimes.indiatimes.com/)