03 January 2012

Drop in US visa grants creates problems for software companies

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A 28% drop in US visa approval for Indian software companies is reason for concern within one of the country's most burgeoning industries.

US visa

The US insists Indians are not being treated unfairly

Of the many types of US visa available, many international employers use the L-1 Intracompany Transferee visa to send their employees to America. Indian companies have utilised this facility to send employees to the US to complete assignments of varying durations for years; however, the number of short term visas granted to Indian professionals has fallen for the first time, prompting calls from many Indian companies of unfairness to their budding collection of skilled IT professionals. 

Up to 35,000 Indians typically travel to the US each year for software companies such as Infosys and Tata Consultancy Services; of these 35,000, as many as 40% of work permits are granted under the L-1 category which is intended for workers with specialised skills. However, data from the National Foundation for American Policy has shown that the rate of approvals for L-1 visas was 28% lower in 2011 than previous years for Indian software companies while similar visa applications from other countries rose by up to 15%. 

The foundation claimed in their report that this raised "policy questions as to whether this great disparity is the result of a conscious policy at US posts in India", a point seemingly supported by the president of software industry lobby Nasscom who claimed that American companies such as IBM and Accenture would also suffer if their India based employees could not travel to the US. 

US authorities claim that the increased scrutiny of India’s $70 billion IT industry is due to claims by an American employee that Infosys was exploiting the short term work permits offered by the US. 

In response, the fees for visas in the H1 and L1 categories which are typically the most frequented by Indian companies have been doubled. The Indian economy’s reliance on US exports has meant that the Indian government has been attempting to persuade the US to reduce the restrictions on visa approval. 

Former head of immigration at Infosys Eshan Joshi claims that the US should create a new visa category specifically tailored to the technology sector due to the increasing complexity of securing a work permit: “It makes executing projects very difficult, but not a fatal business in the long term. Companies need to reduce dependence on such work permits.” 

Whether a new category will be created looks doubtful; the US claims that nothing is amiss with their approval rates and that India already receives the vast majority. Despite these claims, any visa rejection can be extremely costly for an Indian company competing for contracts and in precarious financial times, Indian companies are facing the prospect of becoming over reliant on a remote presence. 

The American Visa Bureau is an independent migration consultancy specialising in helping people with their ESTA visa application to the American embassy.

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