Nearshore Americas

Nasscom Chairman Criticized for Not Fighting Back on U.S. Visa Surcharge

SOURCE: Economic Times

BANGALORE | MUMBAI: Nasscom chairman Harsh Manglik’s silence on the US government’s controversial decision to increase visa fees has triggered discontent in India’s software circles, and threatens to create nationalistic discord in an industry that has prided itself on its unity.

For many days now, America’s visa gambit — its move to pay for border security with what is essentially an indirect cess on Indian software firms — has been roundly condemned by all those who matter in this country. Except by Mr Manglik, the titular head of India’s software industry grouping and boss of Accenture in India.

Indian tech firms fighting an image battle in their top export market, US, are now questioning the Nasscom chairman’s continued silence. “How can the office of Nasscom chairman be silent on an issue that has seen people describe the work done by Indian tech firms as ‘chop shop’?,” said a senior official at one of the top five Indian software exporters. He requested anonymity because his company has not authorised him to comment on this issue.

At least a dozen officials at top Indian tech firms ET spoke with, said they expect the chairman to take a stand on issues affecting the industry’s interests. All of them requested anonymity.

Mr Manglik took over as Nasscom chairman from Pramod Bhasin, the CEO of Genpact, in April this year. While presenting the US-Mexico Border Security Bill last week, senator Charles Schumer said US-based software companies, where locals account for less than half the total workforce, will have to pay 100% higher visa fees for every professional they bring from countries such as India. This, he added, would also help American companies, including IBM and Accenture.

The passage of the Bill has created outrage in India, with the union commerce secretary, Rahul Khullar, openly dubbing it a violation of WTO laws. The government is thinking of complaining to the global trade body. Many software companies and the US Chamber of Commerce have roundly criticised the Bill.

Accenture is listed as one of the contributors to senator Schumer’s election campaign, according to the website, which tracks political donations in the US.

Accenture’s Political Action Committee has also made donations to Iowa’s Republican senator Charles Grassley during the 2009-2010 campaign cycle. Last year, the senator had reintroduced a stricter H-1B visa reform legislation, making it mandatory for outsourcing companies, such as TCS, Wipro and Infosys, to hire local American workers before seeking any H-1B visas for their Indian employees.

“The backlash in the US has started taking a very formal legislative shape, we now need the MNCs here to take a stand similar to how we support the anti-piracy movements there,” said a chief executive at another Indian tech firm based in Bangalore.

Nasscom president Som Mittal declined to offer any specific comment on the issue, but said the association brings MNCs, Indian firms and captive operations on one single platform. Mr Manglik’s office did not respond to an email questionnaire sent by ET last week.

Multinational software firms, such as Accenture and IBM, account for nearly one-third of the $50-billion exports by Indian outsourcing industry. Accenture, on its part, employs over 50,000 staff in India, while IBM has nearly 1,00,000 professionals in the country.

“In fact, Mr Manglik and executives at other MNC firms have in the past offered help in terms of connecting with local policymakers, but what’s been missing is a public stand,” said another official at one of the top five Indian software exporters. Experts such as Norman S Matloff, professor of computer science at the University of California, said senator Schumer’s bill poses tough questions for Indian-Americans such as Mr Manglik.

“I am not very knowledgeable in what the various lobbyists are doing. However, one thing I do know is that people like Manglik are in very delicate situation, much more so than people in India may realise,” said Mr Matloff.

Multinational rivals of the Indian tech firms, such as Tata Consultancy Services, Infosys and Wipro, have stayed away from uncomfortable debates about immigration and anti-offshoring rhetoric in their home country. “Despite expansion and increased presence in countries like India, please understand that it’s not a very good thing to confront your home government head on — it’s better to stay silent,” said a senior official at one of the multinational software firms having presence in India.

Accenture, along with Microsoft and several other American tech firms, is also a member of Compete America, a coalition aimed at creating more American jobs and prevent misuse of work permits by foreign companies.

“I presume Mr Manglik has retained his US citizenship, and plans to stay active in Accenture US in whatever sense, and at least keep his options open for other US firms in the future,” said Mr Matloff. “So Mr Manglik has to be very, very careful. In that sense, he might be regretting now that he took the Nasscom position,” Mr Matloff added.

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Another official at an Indian tech firm, which counts GE among its top customers, said the hike in H-1B visa fees tacitly benefits companies such as Accenture and IBM by putting Indian companies at a competitive disadvantage, but Mr Manglik’s silence was more diplomatic than political.

“Nasscom has always had to play a balancing act, since it has four constituents among its members — captive units, multinational firms, large Indian IT firms, and small- and medium-size firms,” he said. “There are still a number of common issues that bond all of them together, so far no one constituent has been at loggerheads with the other.”

“Americans want immigrants to become one of them. It’s okay and natural to retain ties with the old country, but when those ties become stronger than one’s ties with the US, people in the US are much less welcoming. Schumer’s bill must be painful for him,” added Mr Matloff.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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