India Criticizes New U.S. Outsourcing Fee

In the latest battle over outsourcing, the Indian government has fired back at the U.S. Last week, U.S. senators unanimously passed a proposal to nearly double the fees on work visas for Indian IT companies sending workers to the U.S. Indian Trade Minister Anand Sharma has called the move “highly discriminatory” in a letter to his counterpart, U.S. Trade Representative Ron Kirk. As Bloomberg News reports, Sharma writes that “it is inexplicable to our companies to bear the cost of such a highly discriminatory law.”

Sharma must know he’s not going to get a sympathetic ear from Kirk or others in the Obama Administration. Even if they were interested in helping fight this proposal (which they’re probably not), they’re not going to go up against a Senate where there’s rare consensus about the need to sock it to Indian outsourcing companies by charging them more for H-1B or L-1 visas. Stock prices for Infosys, Tata Consultancy Services and Wipro took a hit yesterday as investors worried about the news. The big concern is not the new fee itself; even with the additional $2,000-per-person cost, Indian companies aren’t about to stop sending workers to the U.S. The bigger concern is where this leads. As Sudeshna Sen writes in today’s Economic Times, this is just the beginning, with other Western governments likely to follow the American lead. “So expect more of these measures, in more elaborate and less obvious ways, from every European market in [the] future,” Sen writes. “In a situation of high local unemployment, and political unrest about illegal immigration, new urban myths are being created: in Europe, US, UK, wherever. In the minds of the public, Indian IT workers on work permits, transfers or H1-Bs equate to jobs stolen from locals — and community and national resources in the host countries that these people use.”

Sen calls for Nasscom, the Indian IT industry’s lobbyist, to launch publicity campaigns to dispel those myths and educate Westerners about what Indian IT workers do. Interesting idea, but with unemployment rates so high, Nasscom would have to run quite a PR campaign to convince people that they’re wrong about outsourcing.

Read the original story at BusinessWeek Eye on Asia Blog