THE latest report by the ICRIER Wadhwani Chair has called for a note of caution by the US Govt on the issue of immigration. It states that while it remains to be seen if the US Congress passes immigration reform legislation this year, several provisions contained in Title IV of the measure passed by the US Senate (S.744) in June 2013 have potentially adverse implications, most importantly for US business interests and the US economy.

The Senate bill recognizes the persistent shortage of skilled workers within the US by expanding the annual caps on H-1B visas and employer sponsored green cards, but nullifies some of these gains by placing a number of highly restrictive conditions on the employment, deployment and salaries of foreign workers under the H-1B and L-1 programmes. While claiming to advance “reform” of a skilled labour deficit, S.774 legislates a non-level playing field for Indian IT service providers.

The Indian IT services industry has strongly argued that its utilization of the H-1B programme has facilitated the offsetting of significant domestic talent shortages, thus allowing businesses to remain local to the US. It has also contributed extensively to investment, job creation and local hiring in the US in the midst of an economic downturn. The political outcomes manifest in the contentious provisions of the Senate bill do not reflect a balanced recognition of these factors.

This report argues that taking forward the more balanced provisions of H.R.2131 on skilled non-immigrant visa reform can better achieve domestic policy objectives for the US, while averting deterioration of its business and investment climate and sustaining a mutually beneficial partnership between Indian IT companies and their US clients.

America’s role as a protagonist of an open global economy must start at home with its own policies – in this instance, by upholding a liberal trade regime in IT services. Given its authority over trade issues, this responsibility for preserving openness rests with the US Congress.