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US job visa hike angers India outsourcers

August 14, 2010

India's flagship outsourcing industry reacted angrily on Saturday to a new US law that tightens security at the Mexico border with measures paid for by steep hikes in work visa fees.

The 600-million-dollar measure, signed into law Friday by US President Barack Obama, will sharply increase visa fees for some information technology workers entering the United States.

"The US government has a legitimate right and critically important responsibility to protect its borders but foreign companies should not be asked to bear the cost," said the National Association of Software and Services Companies (NASSCOM), which represents India's leading software exporters.

"Any new fees should have been required of any firms using the programs. This would have been fair and equitable and would not have discriminated against any sector," NASSCOM president Som Mittal said in an emailed statement.

The new law nearly doubles fees on visas for skilled workers brought in by companies whose employees are more than 50 percent foreign, a move that largely affects India's IT and outsourcing industries.

US high-tech firms such as Microsoft, which bring skilled immigrants into the United States on the same visas, would not be hit by the bill as the vast majority of their workforce is American.

NASSCOM has warned that the measures will boost annual US visa costs for the outsourcing industry by 200-250 million dollars annually.

India, which already holds at least 50 percent of the global outsourcing market, has become the world's back office where Western firms set up call centres and number-crunching and software development outlets to cut costs.

But the 50-billion-dollar industry also sends skilled workers to the United States to develop software and direct projects for US clients.

Under the law, the fees for non-immigrant "H1B" and "L" visas go up by 2,000 dollars for firms with more than a 50 percent non-American workforce. The current fee is 2,500 dollars.

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