Obama, in India, will get earful about the H-1B visa

Indian government, industry leaders may ask for administrative changes to work visa rules

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In India, the H-1B visa is seen in an entirely different light than in the U.S. The visa is essential to free trade, and legislative moves by Congress to restrict it are called protectionist and a threat to India's IT industry.

That's what President Barack Obama can expect to hear when he arrives Sunday in India for a three-day visit. White House officials, in a telephone briefing with reporters in advance of the visit, said top issues will be climate change, trade and regional security issues.

The White House didn't mention the temporary work visas at all as a topic, but discussions may be unavoidable. India's tech firms routinely warn investors of the risk of visa policy changes, and those risks have not gone away.

Last year, about $2 billion in IT services was exported from India to the U.S., said David Rutchik, a partner at Pace Harmon, an outsourcing consulting and advisory firm. It's a huge industry, "so it's a high priority to the Indian government and will likely be one of their central topics addressed."

The Indian government has been nervous about Congress for some time. It dodged a bullet with the failure last year of a comprehensive immigration reform bill. One provision in the Senate bill would have set limits on the number of H-1B workers a firm could employ to 50% of its total employment. Some firms may now have visa levels of 75% to 90%.

"That would have been significantly detrimental to the Indian firms," said Peter Bendor-Samuel, founder and CEO of Everest Group, an outsourcing research and consulting firm. For now, the elimination of that limit on visas might temper any discussions with Obama "because the status quo right now favors them."

The Indians know that Obama's ability to affect the H-1B visa is limited, but they may ask for some greater flexibility and administrative changes in some of the visa programs, such as the B-1 business visitor visa, said Bendor-Samuel. That could involve lightening restrictions on the B-1 visa to allow meetings with clients, or increases in the flexibility of L-1 visas, he said.

There's a risk for Obama. He may have the ability to make some changes administratively, but they may spur criticism in the U.S. if those changes are seen as backdoor H-1B increase.

India's IT industry and government leaders are expected to bring up a long-sought request for a totalization agreement with the U.S.

Under a totalization agreement, Indian workers in the U.S. would only pay the Social Security-like taxes due their home countries. Temporary Indian workers in the U.S. see the current arrangement as unfair. They pay into the Social Security system, but if they leave after six years, the length of an H-1B visa, the Social Security payments are lost money. The U.S. offers these agreements to countries in Europe, Japan, Australia, and others.

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