About time the US looked inside the outsourcing machine

Please enable JavaScript for the best SAMAA TV experience.

Note: For enhanced search features, please enable JavaScript.

US green card freeze puts Indian IT giants under scrutiny

It is about time. For years, Indian IT companies have enjoyed a remarkably comfortable position in the United States. They built vast businesses on American soil, recruited thousands of workers, secured hundreds of thousands of visas and became deeply embedded in the American technology economy. At the same time, questions about how some of these companies used the US immigration system kept piling up.

But Washington now appears to have had enough.

The Trump administration has suspended green card processing for several of India’s biggest IT companies, including Tata Consultancy Services, Infosys, Wipro and HCL Technologies. Microsoft, Adobe, Cognizant and Capgemini have also been caught in the sweep.

US officials say some companies laid off American workers while simultaneously seeking immigration benefits for foreign workers. Vice President JD Vance has singled out Microsoft, saying the company laid off 6,000 American workers while benefiting from 6,300 H-1B visas and nearly 3,000 green cards.

The US labour market is supposed to have rules. Under the Permanent Labor Certification programme, companies seeking green cards for foreign employees must demonstrate that employing those workers will not adversely affect American workers’ wages, working conditions or employment opportunities.

That principle should have been enforced much more aggressively years ago. Instead, the system became an extraordinary pipeline for global outsourcing companies. According to US officials, the companies now facing suspension had sought almost three million foreign workers since 2009, receiving more than 230,000 H-1B visa approvals and over 100,000 permanent labour certifications. Considering these numbers, it is obvious that Washington could no longer look the other way.

Indian IT companies have become enormously successful in the American market. There is nothing inherently wrong with that. Competition is part of capitalism, and American companies have every right to hire skilled workers from around the world.

But competition becomes questionable when the immigration system itself becomes part of a strategy for keeping labour costs down.

The issues raised by the Trump administration are particularly damaging because they go beyond simply saying that foreign workers are cheaper or that Indian companies hire too many Indians. US officials claim that some employers advertised jobs in ways that attracted few American applicants and then used the lack of applicants to justify hiring Indian workers.

If investigators establish that such practices took place, the problem is much bigger than immigration. It becomes a question of whether the rules were being manipulated.

And this is where the Indian IT industry should be looking very carefully at what is happening in Washington.

For decades, the industry has benefited from the enormous American market while developing a business model heavily dependent on the movement of Indian professionals into the United States. The model has generated billions of dollars and transformed companies such as TCS, Infosys, Wipro and HCL into global brands.

But success should bring greater scrutiny, not immunity from it.

The response from India’s IT industry has so far been predictable. Nasscom has said that Indian technology companies in the US have already reduced their dependence on H-1B visas and that relatively few employees seek green cards through the PERM process.

That may be true, but it also misses the larger point. If the system is clean, transparent and fair, an investigation should not be a cause for concern.

The American government is now asking whether companies were complying with the very rules under which they sought access to the American labour market. That is a legitimate question. And if wrongdoing is established, penalties should follow regardless of the nationality of the company or worker involved.

There is also something particularly striking about the timing.

The measures come as the Trump administration puts greater emphasis on American jobs and urges companies to keep employment and production in the United States. Washington has already imposed a $100,000 fee on new H-1B petitions for workers hired from abroad and launched an enforcement drive known as Project Firewall.

For too long, the debate over skilled immigration has been presented as a choice between welcoming talented foreigners and protecting American workers. That is a false choice.

America can welcome genuine talent while insisting that companies first follow the rules, conduct meaningful recruitment and avoid using immigration programmes as a back door to cheaper labour.

And India’s technology giants should be perfectly capable of competing under those conditions.

They have spent years telling the world that they are sophisticated global corporations. They cannot demand to be treated like global corporations when seeking business opportunities and then expect special treatment when the rules governing their labour practices are examined.

There is another uncomfortable issue here. Indian professionals are among the biggest beneficiaries of the US skilled-worker visa system. That success has been celebrated as evidence of India’s growing technological power. But the darker side of that success deserves equal attention, which is the enormous dependence of parts of India’s technology industry on access to Western labour markets.

When that access is threatened, the vulnerability becomes obvious. Washington has now put that vulnerability on display.

Whether the allegations against individual companies are ultimately proved remains to be seen. But the questions being asked are long overdue.

If an American worker is dismissed while a company simultaneously seeks immigration approval for a foreign replacement, the government has every right to ask why.

And if immigration programmes designed to address genuine labour shortages are being manipulated, Washington has every right to shut the door.

India’s IT industry may regard the latest move as another protectionist turn under Trump. It would be easier to dismiss the action that way if the allegations were merely about nationality, which they are not. They are about the rules governing who gets access to American jobs and who gets permanent residency through American companies.

For years, Indian IT giants enjoyed the benefits of that system. Now they are being asked to live under its scrutiny.

The Indian establishment will do what it always does. It will talk of discrimination, of the contribution Indians have made to American prosperity, and of the damage to innovation. Some of that is true. However, none of it answers the allegation that a visa programme meant to fill genuine shortages was used to undercut wages while American employees were shown the door.

India has fraudulently sold cheap skilled labour to the world’s richest market for decades and called it a strategy. Now, the US has looked at the invoice, and is renegotiating the price. It is about time.

Whichever govt has held office, containers have appeared on capital's roads before protests