The news doing the rounds these days is that two US senators are introducing bill in the senate seeking to revamp the H-1B visa programme making it tougher for INDIAN IT firms. The reason being sought for the same is rising levels of US employment. - ANTIGLOBALIZATION - This is anti thesis to globalization as it promotes restrictive trade practices. US has been a supporter of free trade since decades & has been vociferous against those who dont follow it but now when it is facing rough waters it has changed its stand on it and is tweaking its immigration laws.
- FALSE CLAIMS - Average stay under H-1B visa is less than two yrs, so the claims by US are false that Americans are losing jobs to Indians and besides that, when Indian firms set up there operations offshore they create job oppurtunities for the local people. President Obama is missing out on a bigger picture by taking such stands.
- LOW COST FACTOR - Many US companies are filing for bankruptcy and profits of many companies have gone down. In such a case they cant be forced to pay higher bills for IT expenses by giving work to their own countrymen, when on the other hand they need to prune it and this can happen only when they give work to Indian IT vendors. Indian IT vendors provide the service at very low cost compared to their counterparts in other countries because of low labour cost and hence India is the only viable option. Us will have to consider all such factors before passing such a bill.
To contact the equity analyst on this story: Ekansh Mittal in Noida (New Delhi) at Ekansh@hbjcapital.com
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