Top outsourcing countries like India are not happy with the recent announcement of a new law passed in the U.S. that would raise the visa fee for skilled workers coming to work in America.
The discontent comes amid much controversy about outsourcing in the U.S. So much so that many Indian outsourcing giants like Infosys and Wipro are establishing alternative facilities in Europe to buffer the drop in demand in North America after the recession.
The downturn in the economy brought about the housing recession and the credit crisis in the U.S. have spiked unemployment in the country to levels close to those in the Great Depression of 1929. And outsourcing just doesn't make sense to a lot of Americans at the moment.
Although proponents of outsourcing say that decreasing expenses add to profits of American companies, this rationale says little about the average workers who now sees his work shipped off to offshoring destinations like India.
Despite mixed rhetoric on the issue, the Obama administration has now enacted the work visa hike, which is really part of a law that has its origin in keeping illegal immigration out along the Mexican border. But skeptics of the law say that they do not see a correlation between illegal immigration and skilled workers entering the country after being hired by U.S. firms. Most of these skilled workers are employed in the IT sector, since man U.S. firms do not have the infrastructure or consider IT to be a core competency of their function.
The new legislation will mean a twofold increase in the work visa fees for those skilled employees entering the U.S. from abroad. This is expected to be a 600-million dollar bill. Outsourcing to India Is one of the ways in which U.S. firms decrease their costs by having Indian engineers take care of their IT work. This also means they do not hire permanent staff and can outsource when there is a need.
However, the new law is just one of the measures proposed recently that reflects the protectionist sentiment of the Obama administration. Recently, New York Charles Schumer put forward a law that levies a tax on calls placed to contact centers outside the U.S.
NASSCOM, India's software export trade organization, has said that the law is discrimination, AFP reports. The President of NASSCOM, Som MIttal added that it sends the wrong message to foreigners who wish to work in the U.S.
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