An employee assembles and inspects mobile phone parts at Rising Stars Mobile India Pvt. Ltd. at Sri City in the state of Andhra Pradesh in India on Thursday, 11th July, 2019. Photographer-Karen Dias/Bloomberg An employee works at the factory of Rising Stars Mobile India Pvt., a unit of Foxconn Technology Co., in Sri City, Andhra Pradesh, India, on Thursday, July 11, 2019. Foxconn, also known as Hon Hai Precision Industry Co., opened its first India factory four years ago, it now operates two assembly plants with plans to expand those and open two more. The company was integral to China’s transformation into a manufacturing colossus, and founder Terry Gou has told India's Prime Minister Narendra Modi that Foxconn could help India do the same. Photographer: Karen Dias/Bloomberg
Debjani Ghosh argues that Indian workers help to fill vital skills gaps © Bloomberg

India’s largest IT industry group has accused Donald Trump’s government of discriminating against Indian workers seeking H-1B visas, as it embarks on a last-ditch lobbying effort ahead of the president’s visit to India this month.

Debjani Ghosh, president of the National Association of Software and Services Companies, has asked to meet Mr Trump’s delegation when it comes to India on February 24.

Nasscom has also implored prime minister Narendra Modi to challenge the president over his crackdown on H-1B visas, which companies in the US use to bring in skilled foreign workers for a limited number of years.

In recent years, the Trump administration has sought to clamp down on what it sees as the abuse of the US’s H-1B scheme by foreign IT companies, enforcing tougher requirements for getting a visa, such as prioritising applicants with US degrees.

Nasscom, which has nearly 3,000 companies, including leading IT companies such as Infosys, Tata Consultancy Services and Wipro, argues that the move has disproportionately affected Indian companies.

“We’re at a loss trying to figure out why we’re seeing the kind of discrimination when this is actually benefiting the US,” Ms Ghosh said, arguing that Indian workers help to fill a vital skills gap in the country.

Critics had long complained that the IT firms were using the visas to hire cheaper Indian employees instead of Americans. Indians make up about 70 per cent of workers on H-1B visas in the US. 

But Nasscom counters that most H-1B visas are actually taken by US firms such as Microsoft or Amazon, and that they enjoy higher approval ratings than the Indian companies. Around 80 per cent of H-1B applications from the likes of TCS and Infosys are approved by US immigration authorities, far below approval rates of as much as 99 per cent for the American tech giants.

Stricter H-1B rules have already dented profits for Indian IT firms, with brokerages Kotak saying last year that the additional US visa costs were likely to weigh on earnings before interest and taxes. 

Nasscom is lobbying the two sides to treat the movement of skilled Indian workers under the H-1B scheme as a trade issue, asking that it be separated from the president’s broader concerns about immigration to the US.

“We just have one request to [our] government, which is — talk to him, make him understand the importance of high-skilled talent mobility,” Ms Ghosh said. “We have to ensure that he understands that this cannot be treated the same way as immigration — they’re two different things. That’s our biggest ask.” 

But her pleas are likely to go unheeded. The US and India are negotiating a limited trade package to resolve market access issues for goods such as dairy and medical devices, but a spokesperson from India’s trade ministry confirmed that visa issues have been excluded from the talks. Observers expect that a limited deal could be signed during Mr Trump’s visit to India. 

Ms Ghosh also argued that lingering stigma around Indian workers is misplaced, as the country’s companies have altered their business models away from lower-value outsourcing to higher-skilled tech work, and have started hiring more locals.

“It was about cost arbitrage in the past, where people would send jobs to India for cheaper cost, but that has completely changed,” she said. “People haven’t realised the change that the industry has gone through, the contribution that it’s making to the US.”

This story has been updated to change a reference to cost arbitration to cost arbitrage.

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