Can Obama stop India from becoming a outsourcing hub

Discussion in 'Politics & Society' started by SHASH2K2, Aug 5, 2010.

  1. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    Outsourcing to India Draws Western Lawyers
    NOIDA, India — As an assistant attorney general for New York State, Christopher Wheeler used to spend most of his time arguing in courtrooms in New York City.
    Today, he works in a sprawling, unfinished planned suburb of New Delhi, where office buildings are sprouting from empty lots and dirt roads are fringed with fresh juice stalls and construction rubble. At Pangea3, a legal outsourcing firm, Mr. Wheeler manages a team of 110 Indian lawyers who do the grunt work traditionally assigned to young lawyers in the United States — at a fraction of the cost.

    India’s legal outsourcing industry has grown in recent years from an experimental endeavor to a small but mainstream part of the global business of law. Cash-conscious Wall Street banks, mining giants, insurance firms and industrial conglomerates are hiring lawyers in India for document review, due diligence, contract management and more.

    Now, to win new clients and take on more sophisticated work, legal outsourcing firms in India are actively recruiting experienced lawyers from the West. And American and British lawyers — who might once have turned up their noses at the idea of moving to India, or harbored an outright hostility to outsourcing legal work in principle — are re-evaluating the sector.

    The number of legal outsourcing companies in India has mushroomed to more than 140 at the end of 2009, from 40 in 2005, according to Valuenotes, a consulting firm in Pune, India. Revenue at India’s legal outsourcing firms is expected to grow to $440 million this year, up 38 percent from 2008, and should surpass $1 billion by 2014, Valuenotes estimates.

    “This is not a blip, this is a big historical movement,” said David B. Wilkins, director of Harvard Law School’s program on the legal profession. “There is an increasing pressure by clients to reduce costs and increase efficiency,” he added, and with companies already familiar with outsourcing tasks like information technology work to India, legal services is a natural next step.

    So far, the number of Western lawyers moving to outsourcing companies could be called more of a trickle than a flood. But that may change, as more business flows out of traditional law firms and into India. Compensation for top managers at legal outsourcing firms is competitive with salaries at midsize law firms outside of major metropolitan areas of the United States, executives in the industry say. Living costs are much lower in India, and often, there is the added allure of stock in the outsourcing company.

    Right now, Pangea3 is “getting more résumés from United States lawyers than we know what to do with,” said Greg McPolin, managing director of the company’s litigation services group, who divides his time between India and New York.

    Outsourcing remains a highly contentious issue in the West, particularly as law firms have been trimming their staffs and curtailing hiring plans. But Western lawyers who have joined outsourcing firms are unapologetic about the shift to India.

    Leah Cooper left her job as managing lawyer for the giant mining company Rio Tinto in February to become director of legal outsourcing for CPA Global, a contract legal services company with offices in Europe, the United States and India. Before hiring Ms. Cooper, CPA Global added lawyers from Bank of America and Alliance & Leicester, a British bank. The company has more than 1,500 lawyers now, and Ms. Cooper said she planned to hire hundreds in India in the next 12 months.

    At Rio Tinto, Ms. Cooper said, she became a champion of the idea of moving work like document review to a legal outsourcing company “because it works really well.”

    “It really is the future of legal services,” said Ms. Cooper, an American based in London who travels regularly to India and has spoken widely in promoting outsourcing. Still, she acknowledges hostility toward the practice. “When I was doing public speaking, people used to joke that I had better check under my car” for something planted by a junior associate angered by her views, she said.

    Many legal outsourcing firms have offices around the world to interact with clients, but keep the majority of their employees in India; some also have a stable of lawyers in the Philippines. Thanks to India’s low wages and costs and a big pool of young, English-speaking lawyers, outsourcing firms charge from one-tenth to one-third what a Western law firm bills an hour.
    Employees at legal outsourcing companies in India are not allowed by Indian law to give legal advice to clients in the West, no matter their qualifications. Instead, legal outsourcing companies perform a lot of the functions that a junior lawyer might do in a American law firm.
    Even global law firms like Clifford Chance, which is based in London, are embracing the concept.

    “I think the toothpaste is out of the tube,” said Mark Ford, director of the firm’s Knowledge Center, an office south of New Delhi with 30 Indian law school graduates who serve Clifford Chance’s global offices. Mr. Ford lived in India for six months to set up the center, and now manages it from London.

    “We as an industry have shown that a lot of basic legal support work can successfully be done offshore very cost-effectively with no quality problems,” Mr. Ford said. “Why on earth would clients accept things going back?”

    Many corporations agree that outsourcing legal work, in some form or another, is here to stay.

    “We will continue to go to big firms for the lawyers they have who are experts in subject matter, world-class thought leaders and the best litigators and regulatory lawyers around the world — and we will pay a lot of money for those lawyers,” said Janine Dascenzo, associate general counsel at General Electric.

    What G.E. does not need, though, is the “army of associates around them,” Ms. Dascenzo said. “You don’t need a $500-an-hour associate to do things like document review and basic due diligence,” she said.

    Western lawyers making the leap to legal outsourcing companies come for a variety of reasons, but nearly universally, they say they stay for the opportunities to build a business and manage people.

    “In many respects it is more rewarding than jobs I had in the United States,” said Mr. Wheeler, who moved to India when his Indian-born wife took a job here in 2006.

    “If you’re talking about 15 employees in a windowless basement office, I’m not interested in making that my life’s calling,” he recalled thinking when he started talking to Pangea3. “But building a 500-person office, now that is a real challenge.”

    Shelly Dalrymple left her job as a partner at a firm in Tulsa, Okla., in 2007 and is now based in India as the senior vice president of global litigation services at UnitedLex, a legal outsourcing company with offices in the United States, Britain, Israel and India.

    When she first joined the industry, she said, growth was being driven by corporations that were pushing law firms to outsource to save money. Now, Western law firms themselves are starting to embrace the industry, she said. “We are seeing law firms who are putting a lot of thought into their future coming to us with interesting and creative ideas,” she said.

    Partners in the West are asking legal outsourcing companies in India to create dedicated teams of lawyers for their firms, for example. Those teams could expand and contract depending on how much business the Western firm has. “That means a law firm with 500 members in Chicago can compete with a 2,000-member firm in New York,” Ms. Dalrymple said.

    Moving to a legal outsourcing firm, especially in India, is not for everyone. About 5 percent of Western transplants cannot handle it and move back home, managers estimate.

    Some find it hard to adapt to India. Other times, the job itself does not suit them — after spending years working nearly independently as a litigator, for example, it can be hard to transition to managing and inspiring a team of young foreign lawyers.

    Even lawyers who stay are sometimes wistful about their previous careers. “Of course I miss litigation,” Mr. Wheeler said. But, he added, “watching people learn some of the same skills I did is gratifying.”
     
  2.  
  3. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    BPO segment leads growth in IT contracts in June quarter: report
    Global outsourcing saw a 12% rise in the number of registered deals to 498 in April-June over the preceding quarter, but the annual contract value of such deals declined by 22% to $3.03 billion (around Rs14,000 crore), says a report by Everest Group.

    The international information technology (IT) consultancy firm only tracks publicly announced deals.

    Everest analysts credited the growth in banking, financial services and insurance (BFSI) for raising the number of deals, and attributed the decline in contract value to a steep fall in outsourcing of IT-specific jobs.

    “The global outsourcing and offshoring market continues to grow on the back of transaction volumes and positive traction in the BFSI vertical,” said Gaurav Gupta, India head at Everest.

    Registered business process outsourcing (BPO) deals increased by 15% sequentially, while their annual contract value also went up by 23%, says the report titled Market Vista. In contrast, the contract value of IT deals declined by 110%, pulling down the overall contract value.

    Explaining the inconsistency between rising number of deals and falling contract value, Amneet Singh, vice-president of Everest, said post-slowdown, companies are signing smaller contracts.

    “The surge in BPO deals is largely because BPO is concerned with keeping the lights on (essential) kind of work and it is also a valuable lever to cut costs for clients,” he said.

    Though discretionary IT spending is back, Singh said customers have not loosened their purse strings substantially on this count.

    Last month, Everest’s rival Technology Partners International Inc. (TPI) also reported a decline in the contract value of IT outsourcing deals in key markets such as the US and Europe.

    At $9.5 billion, the value of contracts (each worth at least $25 million) awarded in the US in the three months ended 30 June fell by 9% compared with the quarter ended 31 March.

    The decline in Europe, West Asia and Africa was 21%, TPI said. The Everest report said the BFSI sector, traditionally a large spender on technology, continued to enjoy the lion’s share of new deals (21%) on the back of fresh mergers and acquisitions.

    Market activity in this sector increased by 41% in the June quarter compared with the March quarter.

    In manufacturing, retail and distribution, the number of deals fell by 12% while contract value declined by 17%. “The stronghold of this vertical is in Europe, and the current sluggishness in the continent explains the decline,” said Singh.

    The UK market saw transactions decline by 15% sequentially, though contract value remained constant.

    The rest of Europe saw the number of deals increase to 149 from 112 in the March quarter, again thanks to the BFSI sector. But their annual contract value dipped by 41%.

    Markets outside the US and Europe also showed signs of opening up, with the deal volume growing by 13% Half the reported deals came from Australia and India.

    India remains the preferred destination for outsourcing, with 18 of the 38 new captive centres announced during the June quarter being set up in the country.

    Energy and petrochemicals firm Shell plans to expand its technology centre in Bangalore by hiring more than 1,000 employees. China Wireless Technologies also plans to set up a research and development centre in the country with more than 500 people.
    http://www.livemint.com/2010/08/04211036/BPO-segment-leads-growth-in-IT.html?atype=tp
     
  4. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

    Joined:
    May 25, 2009
    Messages:
    10,233
    Likes Received:
    3,896
    Location:
    Holy Hell
    India as an outsourcing hub can be stopped. But outsourcing itself cannot be stopped.
     
  5. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    Obama might be claiming a victory here but I dont see much effect at least at India. More and more projects are coming through.
     
  6. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

    Joined:
    Nov 16, 2009
    Messages:
    9,252
    Likes Received:
    3,347
    Location:
    Brussels
    Indian share in US's IT outsourcing in few streams (including BPO) has been cut slightly due to rise of some other eastern countries. When the labor & running cost is lesser than India in such countries, the companies prefer them at some point. However, its not Obama's decision to stop outsourcing to India or any other. The MNCs are the one calling shots in this case.
     
  7. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    I would say we are going up the ladder in terms of process and technology . some process are moving out but they are not so good in terms of technical expertise needed to handle them but at same time many bigger and better processes are coming in to more than compensate for them. SO growth is still there .
     
  8. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

    Joined:
    Nov 16, 2009
    Messages:
    9,252
    Likes Received:
    3,347
    Location:
    Brussels
    I would be happy if Indian IT industry marginally shifts from service-providing to Product oriented approach. The problem usually faced by Indian IT firms is the distribution for their product. If the desi firms scores in this area, it'll eat the biggies in overall IT competition. In that case no person be Obama or EU leaders can dream of banning outsourcing from India.
     
  9. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    Nrj this article is old but is relevent .

    In India, Anxiety Over the Slow Pace of Innovation

    BANGALORE, India — In the United States and Europe, people worry that their well-paying, high-skill jobs will be, in a word, “Bangalored” — shipped off to India.
    People here are also worried about the future. They fret that Bangalore, and India more broadly, will remain a low-cost satellite office of the West for the foreseeable future — more Scranton, Pa., in the American television series “The Office,” than Silicon Valley.

    Even as the rest of the world has come to admire, envy and fear India’s outsourcing business and its technological prowess, many Indians are disappointed that the country has not quickly moved up to more ambitious and lucrative work from answering phones or writing software. Why, they worry, hasn’t India produced a Google or an Apple?

    Innovation is hard to measure, but academics who study it say India has the potential to create trend-setting products but is not yet doing so. Indians are granted about half as many American patents for inventions as people and firms in Israel and China. The country’s corporate and government spending on research and development significantly lags behind that of other nations. And venture capitalists finance far fewer companies here than they do elsewhere.

    “The same idea, if it’s born in Silicon Valley it goes the distance,” said Nadathur S. Raghavan, a investor in start-ups and a founder of Infosys, one of India’s most successful technology companies. “If it’s born in India it does not go the distance.”

    Mr. Raghavan and others say India is held back by a financial system that is reluctant to invest in unproven ideas, an education system that emphasizes rote learning over problem solving, and a culture that looks down on failure and unconventional career choices.

    Sujai Karampuri is an Indian entrepreneur who has struggled against many of these constraints.

    His Bangalore-based company, Sloka Telecom, has developed award-winning radio systems that are more flexible, smaller and less expensive than equipment used by phone companies today. Mobile phone companies and larger telecommunications equipment suppliers are buying and testing his products, but he has not been able to interest Indian venture capitalists. For the last five years he has run his firm on $1 million he raised from acquaintances.

    “I can only afford to trial with one customer at a time and that takes three months to materialize,” said Mr. Karampuri, who has considered moving the company to the United States to be closer to venture capitalists who specialize in telecommunications. “You are always worried about paying next month’s salary to people. Should you keep the money for this trial or next month’s salary?”

    Companies like Sloka Telecom are important, analysts say, because they are more likely to create the next wave of jobs than large, established Indian technology companies, many of which are experiencing slower growth. These companies could also help offset some of the outsourcing jobs the country will likely lose because of greater automation and competition from countries where costs are even lower.

    There are historical reasons that starting a business in India is difficult. During British rule, imperial interests dictated economic activity; after independence in 1947, central planning stifled entrepreneurship through burdensome licensing and direct state ownership of companies and banks.

    Businesses found that currying favor with policy makers was more important than innovating. And import restrictions made it hard to acquire machinery, parts or technology. Inventors came up with ingenious ways to overcome obstacles and scarcity — a talent Indians used the Hindi word “jugaad” (pronounced jewgard) to describe. But the products that resulted from such improvisation were often inferior to those available outside India.

    “We were in an economy where, forget innovation, expansion was discouraged, creating wealth was frowned upon, there was no competition to speak of,” said Anand G. Mahindra, who heads the Mahindra & Mahindra business group and has spoken about the need for more innovation.

    Indian leaders began embracing the free market in the 1980s and stepped up the pace of change in 1991 when the country faced a financial crisis. Those changes increased economic growth and made possible the rise of technology companies like Infosys and Wipro, which focused on providing services for American and European corporations.

    Yet, the government still exerts significant control, especially in manufacturing, said Rishikesha T. Krishnan, a professor at the Indian Institute of Management in Bangalore.

    “To start a services company it really takes you just two or three days to get going,” said Mr. Krishnan, whose book, “From Jugaad to Systematic Innovation: The Challenge for India,” is to be published next year. “The moment you are looking at manufacturing, there are hundreds of inspectors and regulations.”

    Raising money is one of the biggest challenges entrepreneurs face. Venture capital funds have flocked to India in recent years, but they are more likely to invest in established businesses than young firms.
    In the United States, Israel and elsewhere, the initial, or seed, capital for many start-ups comes from rich individuals known as angel investors. But most rich Indians prefer to invest with family members or close friends because its considered safer and provides assurance that the lender will be able to borrow from relatives in the future.
    Skip to next paragraph
    Multimedia
    Untapped PotentialGraphic
    Untapped Potential

    “If you want to raise $3 to $4 million, it’s doable,” said Sumir Chadha, who co-heads Sequoia Capital’s Indian operations. “But it’s difficult if you want to raise $300,000 or $400,000,” a typical investment at the early stages of a company’s life.

    When Cellworks Group, which has most of its operations in Bangalore, was looking to raise money last year, executives talked to venture capitalists here and abroad. But the company raised all of the money it needed in the United States, because most local investors did not have the expertise to evaluate the biotech firm, said Taher Abbasi, the chief executive.

    Cellworks has planted its corporate headquarters and a small staff near San Jose so it can be close to investors and American universities for research collaboration on cancer drugs.

    “To really kick off entrepreneurship without local money is very difficult,” Mr. Abbasi said.

    Still, he said, India has its advantages. Engineers and biologists are plentiful, though they need to be trained more than their counterparts elsewhere. And operating costs are a lot lower than in the San Francisco Bay Area, which was critical more than two years ago when he and his partners started the company with their own money.

    There may yet be hope for Indian innovation.

    Some are looking to fill the venture fund vacuum. A group called Mumbai Angels holds Saturday meetings every two months at which entrepreneurs pitch ideas to affluent investors. Members of the group have invested in about 20 companies, said Prashant Choksey, a co-founder.

    Separately, N. R. Narayana Murthy, the chairman of Infosys, recently sold $38 million worth of shares in his company to start a new venture capital fund. Mr. Raghavan, the former Infosys executive, has invested about $100 million in start-ups like Connexios Life Sciences, which is developing drugs to treat diabetes and other diseases. Many Indian universities have also started entrepreneurship programs and classes.

    Vivek Wadhwa, a former technology entrepreneur who now researches innovation, said the climate for start-ups in India was a lot better than it was a few years ago. It should continue to improve, he said, in part because companies like General Electric have hired tens of thousands of engineers in India to work in research and development.

    “Once they have been working on these projects for a few years they will outgrow the companies that they are working for,” he said. “They will hook up with these entrepreneurs that failed” on previous start-up attempts and create new companies.

    Another change may augur well. Until early this decade, the Indian market was too small and isolated to make it very lucrative for businesses to develop products here, so most technology companies focused on selling services to the West, said Girish S. Paranjpe, joint chief executive of Wipro’s information technology business. “That will change dramatically because the Indian market has become bigger,” he said.

    In the last eight years, the size of the Indian economy has roughly doubled along with the importance of foreign trade. There could still be something to envy and fear.
    http://www.nytimes.com/2009/12/09/business/global/09innovate.html?fta=y
     
  10. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

    Joined:
    Nov 16, 2009
    Messages:
    9,252
    Likes Received:
    3,347
    Location:
    Brussels
    Very nice article. This is indeed the ground reality of Indian IT sector. And I am sad that NY Times has recognized this but the pace of required measures by GOI is slow. The leaders of IT like IBM, Accenture, Microsoft etc know this very well & that is why they've hold the Distribution system in the market all over the world very tight. But the time will change & it won't be rapid unfortunately.
     
  11. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    compared to quality of software development or IT outsourcing to India about 10 years ago there is vast improvement but still we are mainly into services field . we need to put stress towards innovation and spend on research and developments. Hopefully in nest 10 years we will do a lot better . Though I have doubt that improvements will not be very rapid.As Indian companies will get richer day by day we will get into product field as well.
     
  12. LETHALFORCE

    LETHALFORCE Moderator Moderator

    Joined:
    Feb 16, 2009
    Messages:
    20,543
    Likes Received:
    6,547
    There is no other country with a big enough high tech /programming base to replace India, Obama needs to focus on bringing back manufacturing rather than focusing on non issues. So far Obama has fixed nothing made things worst and spent his whole presidency focusing on Non issues. If USA were to outsource elsewhere it would be a positive for India and possibly EU . India would go from providing labor to forming companies that will be more competitive than American companies and EU may pick up the outsourcers and partner with India in becoming the new hig tech IT leaders??? The outsourcers basically replaced highly paid Indian Americans with rupee paid Indians.
     
    Last edited: Aug 5, 2010
  13. Russell Smith

    Russell Smith New Member

    Joined:
    Aug 8, 2010
    Messages:
    1
    Likes Received:
    0
    I'm one of those U.S. lawyers who outsourced themselves to India. I did not do it for lack of a job elsewhere. I'm a Columbia Law graduate and one of the founding partners of a successful New York and London based media law firm. I went to India enthusiastically, to take part in a much-needed revolution in the way legal services are delivered in the West.

    Imagine a new legal landscape where high-quality services are affordable. Imagine deals getting done, because the attorneys don't kill them, with overlawyering and overcharging. Contemplate court cases and other disputes being resolved on their merits, rather than simply on the basis of whether one side cannot or will not pay the absurdly high costs of litigation. Think about legal professionals located in places that suit the interests of clients, rather than in the most expensive parts of the most expensive cities in the world. Consider the resultant savings when legal bills are based on services, not real estate. Envision deals and cases staffed by the most talented and enthusiastic lawyers available. Open your mind to the possibility that some of those lawyers are in India. I know from experience that they are.

    And consider the fact that this kind of outsourcing actually creates more legal jobs in the West, rather than cutting them. Every time a deal is done, or a litigation is waged, because legal services are suddenly affordable, it means more work for the Western lawyers involved in supervision, editing, negotiating, and/or appearing in court. This is not only a dream. It is happening every day, thanks to legal outsourcing in India.

    For example, a Fortune 100 client of my law firm specifically requested that the legal research and analysis needed for a series of multi-million-dollar deals in the U.S. be done by Indian attorneys at our offshore operation in Mysore. This is a situation where, if not for a Western law firm’s off-shoring capabilities, no lawyers would have been hired, because typical Western legal fees would have made it prohibitive. The work would have been done either in-house, or not at all. Because the India team made it possible for the deals to happen, Western law firms ultimately got more business, handling the otherwise non-existent transactions.

    A similar phenomenon has happened in litigation, where corporate clients have chosen to defend themselves against meritless lawsuits, using both U.S. and Indian lawyers. The most high-profile examples are some of the cases filed in Los Angeles against comedian Sacha Baron Cohen. They have been dismissed instead of settled, because of the successful teamwork among attorneys in the U.S. and India. Without legal outsourcing, there might have been no U.S. lawyers hired for any significant litigation work at all, because frivolous cases often are settled at the outset, just to avoid the usual U.S. litigation costs. The off-shoring of legal work is leading to a new breed of benign tort reform, as defendants facing bogus or inflated tort claims are choosing to litigate and win. This in turn discourages such claims. And the money that otherwise would be spent by defendants on nuisance payouts can be plowed by corporations right back into the U.S. economy.

    Does any of this threaten the existence of U.S. law firms? No, unless you want to define American law firms as inherently dinosaur-like, and incapable of changing to avoid extinction. No, the threat is not to law firms themselves, but to an outmoded model of law practice that clients increasingly will not tolerate. We are witnessing the start of a positive, paradigm shift in the way that legal services will be delivered in the West.

    Some law firms are embracing the change, and reaping rewards from it. One example is our own law firm. As a result of setting up our own legal outsourcing company in India, our law firm is receiving more assignments and client revenue, not less. This is coming in part from (a) existing clients who send us “elective” legal work that otherwise would never be performed, due to cost, but which is not a problem when our U.S. lawyers are paid only to supervise and edit the work of attorneys in India, and (b) new clients who come to our law firm only because of our reputation for developing an alternative to the old model.

    So there is no need to start making funeral arrangements for the U.S. legal industry. Forward-thinking law firms will adapt, embrace legal off-shoring, and learn how to make it serve not only the interests of their clients, but their own.

    Russell Smith
    SmithDehn LLP
    SDD Global Solutions
    high-end legal outsourcing
     
  14. Rage

    Rage DFI TEAM Stars and Ambassadors

    Joined:
    Feb 23, 2009
    Messages:
    5,410
    Likes Received:
    971
    You, my sir, are the man.
     
  15. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

    Joined:
    Nov 16, 2009
    Messages:
    9,252
    Likes Received:
    3,347
    Location:
    Brussels
    Thank you for the detailed insight into the Outsourcing situation of Legal sector. I believe EU also stands on some similar grounds about the Indo-EU FTA & outsourcing issues. Law firms in India & EU are pretty excited for such opportunities... :)
     
  16. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    ‘U.S. visa fee hike will make Indian companies less competitive’

    Terming a U.S. proposal to increase visa fees as discriminatory, Commerce and Industry Minister Anand Sharma said the hike would cost Indian firms USD 200 million extra a year and make them less competitive.

    “The Bill will have an (estimated) additional cost implication of over USD 200 million annually and an adverse impact on the competitiveness and commercial interests of Indian companies....,” Mr. Sharma said in a letter to U.S. Trade Representative Ron Kirk.

    The U.S. Senate on August 5 had approved a substantial increase in application fees for H1-B and L visas, the most sought after Indian IT professionals. The hike is proposed to fund a USD 600 million emergency package to improve security along the porous Mexican border.

    The Senate measure increases the visa fee to USD 2,000 per application on those companies that have less than 50 per cent of their employees as American citizens.

    In his letter, Mr. Sharma conveyed the concerns of the Indian software industry that the increase in U.S. visa fee would adversely impact companies of Indian origin, which account for about 12 per cent of the total number of visas issued by the U.S.

    Mr. Sharma said though the need of the U.S. Government to strengthen their border security is understandable, “it is inexplicable to our companies to bear the cost of such a highly discriminatory law“.

    While the U.S. companies use H-1B and L visas in larger numbers, they will not be liable for the increased fees but Indian companies will be affected as they are likely to have more than 50 per cent of the their employees on these visas.

    Mr. Sharma further said that the Indian software industry is already deeply burdened in the absence of a Totalisation Agreement, requiring them to pay more than USD 1 billion every year to the U.S. government in the form of social security, with no benefit or prospect of refund.

    The proposed massive increase in visa application fee would primarily affect the top Indian IT companies, who rely much on these categories of visas to continue with their work in the U.S. http://www.thehindu.com/news/national/article562772.ece
     
  17. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    Visa row: US officials start talks with various parties

    Well aware that the visa row could have a direct impact on the fast growing economic ties with India, the Obama Administration has swung into action to initiate talks with the leaders at the Capitol Hill and the business community over the issue.

    But there is no unanimity within the Obama Administration on this issue that has the potential to jeopardise the Indo-US business ties, officials privy to the discussion said.

    "This is an issue that we have had conversations with leaders on the Hill about. We've also had conversations across the government and we are listening to the concerns that business leaders have indicated and will be continuing our dialogue on this issue," State Department spokesman P J Crowley said.

    Corporate America had warned that the passage of the Border Security Bill, which seeks to fund enhanced security measures along the US-Mexico border by raising fees for certain category of visas, would undermine the growing economic relationship between the two countries.

    A senior Obama Administration official noted that this is "not a done deal yet" and the government is looking at it in depth to resolve the issue by talking with the leaders of the Congress, the business community and those within the government.

    "There may be varying views about this within the government. We have to decide what our position is," the official told reporters on condition of anonymity.

    Another official said several people in the Obama Administration and the Congress are uncomfortable with the funding measure of the Bill, which essentially attacks the Indian companies.

    But given the prevailing mood in the country on the eve of the crucial mid-term election, they do not want to be seen in anyway opposing a measure which is strengthening border security, the official observed.

    The main focus of the controversial bill is on strengthening security along the Mexico border. Because immigration has become a major issue in Southern States and there is also the unemployment dimension, nobody wants to be seen to be acting against such a measure, official noted.

    Some US analysts have also pointed out that the real problem for US trade and unemployment is China, but because the economic and financial nexus with Bejing is so strong that there is essentially some kind of a fear of taking on China.

    Hence, a soft and friendlier target India appears to have been hit.

    The US would not like to have any adverse impact on the Indo-US economic ties given that Secretary of State Hillary Clinton has emphasised on the importance of building on the economic relationship between the two countries, officials said.

    On her maiden trip to India in 2009 in her capacity as Secretary of State, Clinton made Mumbai her first stop and had her first meeting with the business community of India. This summer, Clinton opened up the Foggy Bottom headquarters of the State Department for the Indo-US CEO's Forum meeting.

    In a statement on Tuesday, the US-India Business Council (USIBC) that represents American companies doing business in India had urged the Congress and the Obama Administration to resist from taking such "draconian" measures.

    "We urge the Congress and the Obama Administration to amend this new funding method for border security and any policies that would harm America's economic interest and undermine the burgeoning economic, trade and strategic relationship with India," said Ron Somers, president USIBC, an affiliate of the US Chamber of Commerce.

    "It is unfortunate that the Congress passed a Bill that not only links India to border security with Mexico, but also does not take into account the terrible economic impact this will have for the United States," Somers said.

    The new Bill imposes substantial and discriminatory fee increases on global information services companies that utilise temporary, non-immigrant visas (H-1 and L-1) to bring in skilled professionals to serve American companies, he said, adding the USIBC hopes amendments will excise these harmful provisions.

    "The value and expertise American companies receive from these services firms strengthen their global competitiveness and help to fuel innovation at home. Moreover, many companies, confronted with higher costs due to the legislation, will be an incentive to move more jobs and businesses offshore," he added.

    http://indiatoday.intoday.in/site/Story/108668/World/visa-row-us-officials-start-talks-with-various-parties.html
     
  18. hungo

    hungo Regular Member

    Joined:
    Apr 20, 2010
    Messages:
    48
    Likes Received:
    0
    Something from Hindustan Times:

    How’s the chop shop business doing?
    >Well, our revenues grew 30 per cent last year and our profits jumped 45 per cent.

    But surely American companies are sapping the vitals of their economy by shipping technology-intensive white collar jobs to cheaper locations like India. Their continuing search for low-cost production processes is tilting the global economic balance in Asia’s favour.

    >Exactly, but our revenues grew 30 per cent last year and our profits jumped 45 per cent.

    The American politician is finding it very difficult to face his electorate with unemployment nudging 10 per cent. How does he explain to the voter why he just lost his job to an underpaid Indian?

    >Tough, but our revenues grew 30 per cent last year and our profits jumped 45 per cent.

    Disturbing trends are visible in American society as jobs get exported. The simmering discontent is beginning to show on T-shirts claiming ‘I’ve been Bangalored’. We’re talking incipient xenophobia here.

    >Possibly, but our revenues grew 30 per cent last year and our profits jumped 45 per cent.

    Outsourcing is the latest hot potato in bilateral relations between Washington and New Delhi. Do you see the war of words heating up?

    >Maybe, but our revenues grew 30 per cent last year and our profits jumped 45 per cent.

    Do you think the chop shop business is a moral one?

    >Our revenues grew 30 per cent last year and our profits jumped 45 per cent.

    Do say: The last word is a number.

    Don’t say: Talk is cheap.

    http://www.hindustantimes.com/editorial-views-on/editorials/Got-the-chop/Article1-585357.aspx
     
  19. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    I don't understand how Hindustan times can publish this CRAP . No name of person its referring to .
     
  20. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    India not taking American jobs: US Chamber

    WASHINGTON: Corporate America has come down heavily against all those in US who of late have been alleging that Indian companies grab most of the H-1B work visas thus taking away most jobs from Americans.

    In a latest report on immigration, US Chamber of Commerce, which is world's largest chamber with more than three million members, asserted that such an allegation against Indian companies is "hyperbole".

    "While some have expressed fears that H-1B professionals hired by Indian companies threaten the US workforce or have expressed concern that Indian companies do not sponsor many of their employees for green cards the actual numbers are such as to make any concerns overwrought, even if using a simplistic, zero-sum view of the labour market," US Chamber of Commerce said in its latest report.

    "In FY 2009, Indian tech companies used 4,809 new H-1B visas, which equals to 0.003 per cent of the US civilian labour force, less than 1/100th of 1 per cent," it said, adding "Moreover, H-1B use by Indian companies has declined by 70 per cent between 2006 and 2009."
    The new H-1Bs used by Indian companies represented only about six per cent of total initial beneficiaries (new employment), according to US Citizenship and Immigration Services, the report said.

    "When information technology services companies whether Indian or non-Indians perform work in the United States it is only because US companies believe such work makes their businesses more profitable," it said.

    If such service providers enable US businesses to concentrate on core functions and run more effectively, then US companies can hire more people in the long run, it added.

    Read more: India not taking American jobs: US Chamber - International Business - Business - The Times of India http://timesofindia.indiatimes.com/...Chamber/articleshow/6319071.cms#ixzz0wl4X5mg0
     
  21. SHASH2K2

    SHASH2K2 New Member

    Joined:
    May 10, 2010
    Messages:
    5,711
    Likes Received:
    723
    Location:
    Bihar, BanGalore , India
    India may drag US to WTO over visa fee hike issue


    India may drag US to WTO over visa fee hike issue

    India said on Tuesday it may take the United States to the World Trade Organisation over a "protectionist" US move to hike work visa fees that will hit the country's flagship outsourcing sector. The new law earmarks funds from the visa fee hike to pay for the US government's plans to boost security along its border with Mexico to crack down on illegal immigration and drug smuggling.

    India "cannot keep quiet" on an issue that hurts its commercial interests, Rahul Khullar, the top bureaucrat in the commerce ministry, said in New Delhi.

    The visa fee hike "is WTO incompatible," Khullar said, adding the government was now deciding its "next course of action" which could include challenging the US legislation before the World Trade Organisation.

    The 600-million-dollar measure, signed into law last Friday by US President Barack Obama, will nearly double visa fees for some Indian information technology workers entering the United States.

    The National Association of Software and Services Companies (NASSCOM), which represents India's top software exporters, has said the measure will boost annual US visa costs for the sector by 200-250 million dollars annually.

    The US legislation affects those skilled workers brought in by companies whose employees are more than 50 per cent foreign, a move that largely affects India's IT and outsourcing industries.

    US high-tech firms such as Microsoft, which bring skilled immigrants into the United States on the same visas, will not be hit because the vast majority of their workforce is American.

    More than half of the world's top 500 companies outsource work to India, which has become the world's back office where Western firms have set up call centres and number-crunching and software development outlets to cut costs.

    But the industry also flies employees to the US each year to work at their clients' locations as on-site technicians and engineers.

    Under the law, fees for non-immigrant 'H1B' and 'L' visas go up by 2,000 dollars for firms with more than a 50 per cent non-American workforce. The fee now is 2,500 dollars.

    Anti-outsourcing sentiment in the United States has been stoked by high unemployment.
     
    Last edited: Sep 29, 2010

Share This Page