Jaitley flags H-1B concerns with US Treasury Secretary

During his meeting with the US Treasury Secretary, Jaitley also highlighted the contribution Indian companies and professionals are making to the US economy.

President Donald Trump has signed an executive order for tightening the rules of the H-1B visa programme to stop its 'abuse' and ensure that the visas are given to the 'most- skilled or highest paid' petitioners, a decision that would impact India's USD 150 billion IT industry. 

The Indian IT industry has expressed serious concerns over this as these visas are mainly used by domestic IT professionals for short-term work in America. 

Earlier, the finance minister raised the visa issue with US Commerce Secretary Wilbur Ross. 

An official statement said: "Jaitley raised the issue of H-1B visas for skilled professionals from India." 

Issues related to terror funding were also discussed in the meeting and the US Treasury Secretary appreciated the role of India in this regard, including Indo-US cooperation in Financial Action Task Force. 

These matters were discussed yesterday on the sidelines of the Spring Meetings of the World Bank and IMF. 

During the discussions, the statement said Jaitley pointed out India's ambitious reform agenda which is creating new opportunities towards a deeper economic engagement between both the countries in the years ahead. 

"Critical economic issues like Indo-US investment initiative, infrastructure collaboration and NIIF (National Investment and Infrastructure Fund), collaboration with the US for Smart Cities Development were deliberated upon during the meeting," it added. 

The Indian minister also held bilateral meetings with the finance ministers of Sweden, France and Bangladesh. 

The H-1B is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields. Indian technology companies depend on it to hire tens of thousands of employees each year for their US operations. 

The US market accounts for about 60 per cent of the revenue of the Indian IT industry. 

Reforming the H-1B visa system was one of the major election promises of Trump. As per several US reports, a majority of the H-1B visas every year are grabbed by Indian IT professionals. 

India accounts for the highest pool of qualified IT professionals, whose services go a long way in making American companies globally competitive.

The US has accused top Indian IT firms TCS and Infosys of unfairly cornering the lion's share of H-1B visas by putting extra tickets in the lottery system, which the Trump administration wants to replace with a more merit-based immigration policy. 

At a White House briefing last week, an official in the Trump administration said a small number of giant outsourcing firms flood the system with applications which naturally ups their chances of success in the lottery draw.

"You may know their names well, but like the top recipients of the H-1B visa are companies like Tata, Infosys, Cognizant -- they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they'll get the lion's share of visas," the senior official said, according to transcript of the briefing posted on White House website.

Responding to a follow up on why Indian companies were singled out for a mention, the White House response said Tata Consultancy Services, Infosys and Cognizant were the top three recipients of H-1B visas.

"And those three companies are companies that have an average wage for H-1B visas between $ 60,000 and $ 65,000 (a year). By contrast, the median Silicon Valley software engineer's wage is probably around $ 150,000," the official said.

He said contracting firms that are not skills employers, who oftentimes use workers for entry-level positions, capture the lion's share of H-1B visas. "And that's all public record." 

All the three Indian firms refused to comment on the US administration comment. 

The official said H-1B visas presently were awarded through random lottery with about 80 per cent of H-1B workers being paid less than the median wage in their fields. 

"Only about 5 to 6 per cent, depending on the year, of H-1B workers command the highest wage tier recognised by the Department of Labour, there being four wage tiers. And the highest wage tier, for instance, in 2015, was only 5 per cent of H1B workers," he said.

He said workers are often brought in well below market rates to replace American workers, again, sort of violating the principle of the programme, which is supposed to be a means for bringing in skilled labour. 

"Instead you're bringing in a lot of times workers who are actually less skilled and lower paid than the workers that they're replacing," he said. 

So if the current system that awards visas randomly without regard for skill or wage is changed to a skills-based awarding, it would make it extremely difficult to use the visa to replace or undercut American workers, he said. 

"Because you're not bringing in workers at beneath the market wage. And so it's a very elegant way of solving very systemic problems in the H-1B guest worker visa," he said.