As Immigration Bill hangs in the balance, Indian IT visa rejections skyrocket

As Immigration Bill hangs in the balance, Indian IT visa rejections skyrocket

Summary: The sky-high US visa rejection rates could be the beginning of a major existential crisis for Indian IT majors.

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TOPICS: Outsourcing, India
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It could be seen as the unkindest cut of all — doing more to employ Americans when compared to US giants like IBM, but getting hammered for it.

Or at least that's what JPMorgan India analysts Viju George and Amit Sharma contend in a report that was cited in an article in today's Mint newspaper: "The Senate's Immigration Bill ironically favours some firms that don't do as well on job creation as those it disfavours," analysts Viju George and Amit Sharma said in the report. "The offshoring industry in India has created 30,000-40,000 jobs in the US for US citizens (this is likely to be significantly more, counting in green card and in-process green card holders)."

Meanwhile, Indian IT majors are holding their breath, as the Immigration Bill is still with the US House of Representatives and is yet to be passed in what reports say is a strongly divided Congress. If passed, it could be a major blow to all of the IT majors such as Infosys, TCS, Wipro, and Cognizant, among others.

Meanwhile, TCS has revealed that the visa rejection rate has soared from 30 percent to 50 percent, causing the firm to increase the number of people it adds to its ranks from within the US and Canada. "As far as hiring in the US and Canada is concerned, we're hiring almost 600 per quarter — so that's a significant number," said Ajoyendra Mukherjee, global head of Human Resource for TCS, in the Mint article. "We've started doing fresh hiring from the campuses in the US. This time, we've visited 35 institutes in the US." Mukherjee said that ironically, junior hires from India are actually more expensive than those in the US.

US-India relations are at an all time low following the uproar over the Devyani Khobragade incident (where the Deputy Consul General in New York was arrested and allegedly strip searched for misrepresenting how much she paid her staff), as well as the war over India's solar policy that requires sourcing a certain percentage from domestic manufacturers.

If the Immigration Bill is passed, things could get much worse.

Topics: Outsourcing, India

Rajiv Rao

About Rajiv Rao

Rajiv is a journalist and filmmaker based out of New Delhi who is interested in how new technologies, innovation, and disruptive business forces are shaking things up in India.

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18 comments
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  • I'm not quite following...

    You start off by quoting someone saying: "The Senate's Immigration Bill ironically favours some firms that don't do as well on job creation as those it disfavours."

    Then, at the end of your piece, you say:

    “As far as hiring in the US and Canada is concerned, we’re hiring almost 600 per quarter—so that’s a significant number,” said Ajoyendra Mukherjee, global head of Human Resource for TCS, in the Mint article. "We've started doing fresh hiring from the campuses in the US. This time we've visited 35 institutes in the US." Mukherjee says that ironically, junior hires from India are actually more expensive than those in the US.

    Which, to me, would tend to indicate that US immigration policies are resulting in increased hiring of folks living here in the US (I'm assuming that it means citizens, permanent residents and others with work permits). That's a good thing (at least it is to me (an immigrant that now holds a US passport)).
    Flydog57
    • You're not alone

      In your confusion. The fewer the visas, the better.
      cHarley1200
  • Good News for all locally based IT Workers

    Good. About time, countries protected there IT Industries instead of sending jobs overseas to low paid Indians. Hopefully the same will happen in Australia with the 457 Visas.
    trevagreene
    • RE: Good news...

      travegreene,

      Totally agree, as if it isn't bad enough that there's a lot of IT guys out there who were born and raised in this country looking for jobs only to be displaced by someone overseas. Doesn't anyone worry about countries like india getting a lot of sensitive information from people in the united states when we have to use their overseas tech support? I mean it's bad enough now that most credit card companies customer service is in india which has no protection laws if they steal and use your credit card.
      aja-allen
  • The high visa rejection rate

    could be due to the crackdown on fraudulent visa applications.
    I read somewhere that some 25% of the applications had false
    data, such as fake credentials, experience, etc.

    The Indian companies typically rotate their labor from India,
    only keeping them in the US for so many years, then sending
    them back to India. The labor are used as low cost replacements
    for US workers. There is usually no intention to increase the
    US talent pool by converting these workers into US citizens
    eventually. I wouldnt' be surprised if the Indian firms don't pay
    the prevailing wage to the imported workers, or make them
    work longer hours than reported. In a way, one can look at
    the use of short cuts in importing labor is similar to the short
    cuts mainland Chinese manufacturers use in making goods,
    such as the inappropriate use of melamine.

    India will have its day in the sun only for so long, as even
    cheaper countries emerge to undercut its advantages.
    rosanlo
    • Life in our globalized country

      "crackdown on fraudulent visa applications"

      Infosys was caught bringing in Indians via B-1 visas, ones intended for use only for short business meetings. IBM was caught preferring Indian workers over Americans. Both companies paid fines.

      Their punishment should have gone much further. Infosys should have been banned from the U.S. just as Ranbaxy has for the most part been banned for fraud in the pharmaceutical industry. IBM should have been disallowed from feeding at the H-1B trough.

      It would have been productive to see Infosys and IBM executives being perp-walked, but the U.S. no longer takes the prosecution of white collar criminals very seriously.

      "the inappropriate use of melamine"

      Like, Chinese businessmen adding that industrial plastic / poison to baby milk to achieve higher scores on tests for protein?
      saucymugwump
      • Misuse of B-1 visas

        is a fairly common practice. The government can
        easily crack down on this practice by simply denying
        companies who use this loophole to import people
        via B-1, then immediately filing an H-1B petition for
        them now that the imported people are in the US.
        It should be pretty easy to see which companies do
        this on a mass scale, that is, unless the immigration
        authorities are so behind in their computerization
        efforts (shame on Congress if Congress has been
        underfunding this effort).

        I remember one time when, on the first day of the
        government's new fiscal year, all of the available
        H-1B slots for that year were filled, the vast majority
        of applications were from offshorers.

        Priority in H-1B visas should be given to people with
        masters and PhD degrees from accredited US universities,
        then recognized international universities, and finally,
        recognized universities from the offshorers' native
        countries.

        Fraud in H-1B applications occurs when H-1B
        applicants buy degrees from diploma mills (or
        simply claim having degrees when in fact they
        don't). Btw, a president of Radio Shack and a
        president of another company both resigned in disgrace
        because they claimed nonexistent degrees.
        The govenment should vet that the H-1B
        applicant in fact has the degree claimed, which
        is probably not verified now.

        The offshore companies don't let their H-1B
        employees convert to green cards as the employees
        have a tendency to leither start demanding better
        working conditions, that the employers pay the
        prevailing wage the company say they are paying
        (but don't, some companies pay the employee's
        family in India at the local Indian wage, and not
        the much higher US wage), or leave their employers,
        and in many cases, start their own firms.

        In the above case, the H-1B is weilded as a club to
        keep the employee in virtual slavery. The American
        company contracting the offshorer may be aware
        or suspect these criminal practices, but may keep quiet
        for its own selfish reasons. The employee might not
        complain, because living in the US may be prized,
        considering the appalling living conditions in the
        home country.

        Once obtaining a green card, the employee now has
        virtual carte blanche, thorugh the family preference
        immigration system, to bring in relatives, regardless
        of their suitability or potential contribution to US society.
        (The flawed, misguided family preference system is
        another sore point.)
        rosanlo
  • Just say 'no' to more H-1B visas

    My first experience with H-1B visa holders was at a major telecommunications company. These twenty-something Indians would often tell me that they had worked until midnight or even 2AM. Then management started expecting the rest of its salaried employees to do the same thing, just forget we had families or a life.

    Rao wrote that "the offshoring industry in India has created 30,000-40,000 jobs in the US for US citizens," but what he failed to mention is that those new jobs are almost always filled with Indian-Americans, people who were first brought in via H-1B visas. That was my experience.

    If we had a president with b*lls, whether Republican or Democrat, he'd start his first day in office by ordering the State Department to stop approving H-1B visas unless the applicant had a M.S. or PhD (current law allows for most H-1B visas to be given to people with a B.S. or less).

    I wrote two blog posts on this subject: "American schadenfreude and the Senate Gang of Eight's fraudulent immigration reform bill S.744" and "Believe it or not: Barack Obama's SOTU speech" (go to saucymugwump DOT blogspot DOT com).
    saucymugwump
    • Presidents are supposed to follow the law

      This presumably means that the State Department has to come up with legal reasons to reject H1Bs, instead of changing requirements arbitrarily. But there's nothing wrong with Presidents proposing changes to laws they don't like (or proposing outright repeal); indeed, that's part of the job.

      And while we've only had male presidents thus far, there do appear to be a number of female politicians qualified for the job that have some spine.
      John L. Ries
      • You missed the Machiavellian brilliance of my idea

        Yes, presidents are supposed to follow the law. But what do you think would happen if a president declared that the State Department would no longer approve H-1B visa candidates possessing only a B.S. degree? All of the outsourcers and groupies thereof would have a very difficult time complaining about the new policy because they would be explicitly recognizing that the H-1B visa program does NOT function as advertised. Not to mention that the president would still be following the spirit of the law.

        As for Hillary, get real. She is no different than Obama, Bush the Younger, or her philandering husband. If you want someone different, get Elizabeth Warren, Sheila Bair, or Olympia Snowe.
        saucymugwump
  • IBM = Indian Business Machines

    In Australia, IBM are known as Indian Business Machines because they offer a ridiculous cheap price for a tender, win the job, sack all local workers and bring Indians in on 457 Visa's. They house 4-5 Indians in an apartment pay the cost of electricity, gas and pay the Indian worker 1/4 less than what they would pay locals. The local worker cannot compete as the locals don't get companies to pay there bills for them, hence the cost of living for an Indian worker brought into the country on a 457 visa is a lot less than what a local needs to pay to cover living costs.
    trevagreene
    • This is a large part of why...

      ...I dislike guest worker programs. It would be better to abolish them outright. If there are labor shortages, then bring people in on regular visas and let them work wherever they can find gainful employment; so they're operating under the same rules as the locals.
      John L. Ries
      • Under no circumstances...

        ...should foreign workers be subject to deportation because they lose their jobs.
        John L. Ries
  • Please elaborate

    You quote the job creation figure as if it were common knowledge. I assure you that it isn't, so it would be a good idea to explain to us how offshoring created these jobs and whether this is a net figure (gain-loss) or a gross one (jobs created without regard to jobs lost).

    Personally, I think offshoring should be taxed at whatever rate maximizes revenue.
    John L. Ries
    • Let me rephrase that last sentence.

      I think offshoring should be taxed at whatever rate maximizes profit (revenue minus enforcement costs).
      John L. Ries
  • Fake local job creation

    These companies who sack locals, and then bring in cheap labour from India "claim" that they create jobs. The simply use the term that the "role is being done locally" - they don't tell you that it local role is an Indian brought in on a visa as opposed to a citizen of that country.
    trevagreene
  • This might be related to the above story

    http://www.thenational.ae/world/south-asia/liars-for-hire-fake-cvs-and-bogus-references-flood-india-job-market
    marksuarez
  • Says it all really

    http://www.thenational.ae/world/south-asia/liars-for-hire-fake-cvs-and-bogus-references-flood-india-job-market
    trevagreene