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Demand Grows Despite H-1B Fight, TCS Exec Says

Posted by: Bruce Einhorn on August 18, 2010

The chop-shop fallout continues. Senator Chuck Schumer (D-N.Y.) caused an uproar in India recently after he called Indian IT outsourcing companies chop shops during debate on a proposal to double their fees on H-1B and L-1 work visas. The proposal passed—with no nays in the Senate—and the Indian government is now pondering its next move. Prime Minister Manmohan Singh’s government might challenge the U.S. at the WTO, The Economic Times reports. The Economic Times also reports that many Indian IT executives want more push-back from Nasscom, the industry lobbying group.

Not everyone thinks this is such a big deal, though. Vish Iyer is the head of Asia Pacific for Tata Consultancy Services (TCS:IN), one of India’s biggest IT services companies, and he was in Bloomberg’s Hong Kong office the other day to talk up the company’s expansion in China and other parts of the region. Iyer says the new fee and the anti-India rhetoric coming from U.S. politicians isn’t that worrisome. "We must distill the news and politics," he explains. "We have seen this in the past." TCS employs 700 people at a center it opened three years ago in Cincinnati, Iyer adds, and the company is expecting more business from American companies, no matter what the politicians say. With the passage of Wall Street reform, for instance, "we see a phenomenal growth in demand from the U.S. banks," says Iyer. "They need help from people like us."

Reader Comments

indian raj

August 18, 2010 11:03 PM

these are chop shops that do not produce anything original or new. note that the indians cannot produce anything creative. they can just follow what developers tell them too.

this is a good law since these indian compaies are truly sky and rodent like, as they only hire indians. if they operate in the usa, they must hire americans.

however, do not expect indian it to become anything great, as iq tests show that india has a very low iq

so, expect some coemptiton from china bit not india

STOP H1s and L1s

August 18, 2010 11:18 PM

If you want to do business in America, you MUST hire Americans! Period. US Congress should put 50K/year fee onany Corporation who wants to hire H1Bs or L1s. Americans are being displaced at an alaring rate from the IT field. These body shops want to hire only H1s and L1s and get a higher cut! This must be stopped. Our politicians are so ignorant what is going on here. All of them care only about the Corporations and the well being of CEOs!

Ed 'Too Tall' Jones

August 19, 2010 2:27 AM

It is beyond OUTRAGEOUS that India would consider whining to the WTO in order to protect its Indians ONLY hiring policies on AMERICAN SOIL!!! Are Indian companies, OPERATING ON AMERICAN SOIL, exempt from US anti-discrimination laws??? Gee um, why can't Indian companies, OPERATING ON AMERICAN SOIL, hire Americans???

TCS Vice President Phiroz Vandrevala explains; "Our wage per employee is 20-25 per cent less than US wages for a similar employee...Typically, for a TCS employee with five years experience, the annual cost to the company is $60,000-70,000, while a local American employee might cost $80,000-100,000. This (labour arbitrage) is a fact of doing work onsite. It's a fact that Indian IT companies have an advantage here and there's nothing wrong in that. The issue is that of getting workers in the US on wages far lower than the local wage rate."

H-1B visas are supposed to be used ONLY when no American can be found willing/able to do the job! By definition, this means they are NOT supposed to be used to undercut local US wage rates by US or foreign companies!

H-1B is NOT supposed to be a vehicle for foreigners to 'compete' with Americans for US jobs!

Use of 'temporary non-immigrant' H-1B visas for ANY purpose other than to alleviate US 'skills shortages' on a 'temporary basis' (they are NOT immigration visas) amounts to blatant fraud!

The US (and global) economy is NOT getting better - it's getting worse. US unemployment continues to climb. In such a climate, the H-1B/L-1 visa racket lobby can expect the BACKLASH against this scam to intensify. As such; one can only hope that India, NASSCOM, along with the US contingent of the H-1B/L-1 lobby, raises the profile of H-1B/L-1 in the American consciousness!

The US needs Durbin-Grassley H-1B/L-1 visa reform coupled with a taxation policy based on value added in the US - and India needs to be reminded that we are a SOVEREIGN nation!


August 19, 2010 10:26 AM

The $2,000 fee is not nearly high enough to remove the enormous advantages to employers of hiring indentured labor. The H1B gives employers the ability to immediately deport any H1B employee. This amount of power over employees represents a violation of the 13th Amendment to the U.S. Constitution (the amendment that freed the slaves):

"Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Section 2. Congress shall have power to enforce this article by appropriate legislation."

Some claim that the H-1B program helps to create American jobs, but it is currently being used by some companies to outsource American jobs to foreign countries. Under current law, an outsourcing company can use American workers to train H-1B guest-workers, fire the American workers and outsource the H-1B workers to a foreign country where they will do the same job for a much lower wage. In fact, Indian Commerce Minister Kamal Nath has referred to the H-1B as “the outsourcing visa.”

Employers can legally discriminate against qualified Americans by firing them without cause and recruiting only H-1B guest-workers to replace them. The U.S. Department of Labor (DOL) has said: “H-1B workers may be hired even when a qualified U.S. worker wants the job, and a U.S. worker can be displaced from the job in favor of a foreign worker.” Some companies that discriminate against American workers are so brazen that their job advertisements say “H-1B visa holders only.” And some companies in the United States have workforces that consist almost entirely of H-1B guest-workers.


August 19, 2010 1:16 PM

The never ending quest for Cheap Labour.

remember the Mantra... "The goal is not to find an American worker!"



August 19, 2010 1:24 PM

If you have a better mousetrap, the world willkeep beating a path to your door


August 19, 2010 6:56 PM

Actually, Bloomberg is one of the largest sponsors of h1-b visas in the USA!

Perhaps you should mention this every time you post one of these stories.

Rudy Torrent

August 20, 2010 1:21 AM

It is way past the time to end the slumdog slave trade. Support the American techie!

American Tech Worker!

August 20, 2010 9:02 AM

H1B and L1 visa abuse is rampant in the IT field. Corporations with the help of body shops like TATA/Infosys/Agilon/Comsys hire H1Bs and L1s and Americans are being displaced at an alarming rate. With unemployment this high, why do we need H1s and L1s any more ? Our Politicians are out of touch with reality and all of them should be VOTED OUT! Write to your Senators demanding action to end this H1/L1 visa abuse. Do something! You may use the folowing link,


August 20, 2010 10:21 AM

If Americans are to be hired, the government needs to make it easier for the private sector to hire them. Taxation, environmental edicts and anti-business policies will continue to drive American businesses elsewhere for doing business and hiring people. The people who want the government to force private businesses to hire Americans for American jobs don't seem to understand that it is the policies of the same government that are making Americans unviable as employees to these Businesses. If American people lighten up on the rhetoric and idealism about social justice, the environment and taxation big and small businesses will start hiring them again.

Ron Mepwith

August 20, 2010 11:15 AM

CEOs love to find ways to lower the wages of workers while boosting CEO bonuses. The B-1 visa program is a scam that cheats American workers.

Aleksei Svetozarev

August 20, 2010 1:36 PM

I applaud this. About time. I cannot count the times I have watched the Chinese in America hire Chinese and the Japanese, the Brazilians, the you-name-it-nationality do the samen, but they do not hire Americans, yet American companies are supposed to hire all nationalities without discrimation or prejudice.

The boat is full in America.


August 20, 2010 3:01 PM

If the American or any western corporations cared so much for the American workers, they would not have outsourced so much of their IT infrastrucure development work in the first place! The supply for cheap outsourcing indeed stems from the demand for cheap outsourcing from profit-minded corporations and their shareholders - which again is YOU AND ME! It comes full circle my friends! Look at yourself in the mirror and ask yourself one simple question - can you afford to take any additional hit to your 401k, 529, IRA and other investment accounts if all these corporations stopped outsourcing to countries supplying cheaper labor. You all buy Chinese made products in Wal-Marts, Sears, and Macy's. Then why the hypocrisy over IT outsourcing? Wake up dumbos!


August 21, 2010 12:54 AM

Every time Sen. Schumer opens his mouth, he spews bad economics fueled by bad politics. This guy should be forced to take an Economics 101 lesson....


August 21, 2010 2:15 AM

I wish this fees had been raised by $5000. Am so glad the senate did something sensible..Wonder what kept them waiting for 10 which millions have lost jobs, housing and basic human dignity. Hope this will limit the 500,000 new L1's and H1's coming to steal American jobs. Hey Indian coolies, which country are u now heading to destroy...UK, USA, Australia have already been destroyed...wonder which one these skunks will head next too. Seems TCS finds chinese a nice country to ripoff....Am sure they will get kicks in their butts pretty soon...I doubt any Indian would have guts to go live in China.


August 21, 2010 9:01 AM

I love it whenever any story(like this one) involving illegal immigration, legal immigration, foreign workers etc. is covered by the mainstream media, they'll get dozens of quotes from the pro open borders/cheap labor/foreign national side, but perhaps one comment from the American worker side. Things are so crooked it makes me want to barf.


August 21, 2010 1:04 PM

So called TCS made first worlds cheapest car. well done ratan tata, Hatf OFF to you. Can do some thing like that with TCS to transform the world? especially to india? Computerising railways brought efficiancy, where you buy ticket on phone. Computerising banks helped poor formers not to travel 10 miles in dirt. Can you do some thing with TCS? a challenge to you. Perhaps android kind opensource operating system? for the people to watch videos? when google can do it why not TCS? if all tcs employees donate 1% of your salary, you can build public toilets in all 5 major metros at least 1 toilet every mile. indian women dont drink water since they dont find toilets..i want to see some thing from TCS to transfrom the world before ratan dies. where as infosys, let them sing foreign national anthem, by keeping indian poor uneducated and dark.

Raffay gandu

August 21, 2010 4:12 PM

I love indian workers here in the US, my boss is also an Indian, who'll soon get to know the real me, and so will everyone else :)


August 21, 2010 4:51 PM

Nothing like racism to fan the flames. You guys claim to be capitalists yet support protectionist measures found in socialist countries like france and communist countries like china? How pathetic.

And the whole crap about IQ....sounds like someone's whining over sour grapes...the IQ from wikipedia no less is of a few poor Indians in one specific part of India. Not to mention that because of China's strict laws, more people are educated there than in India.

Yet....even with their low average IQs they happen to run 3 of the top ten business schools in the world, are leaders at almost every engineering department in top programs in the USA : Berkely, MIT, Stanford, Caltech. AND happen to be leaders in businesses: Just look up Google's executive committee, Microsoft's, and look at the guys running wall street. If they ain't Jewish, they're Indian.

Nice to see the maggots come out the woodwork and spew racist tirades because they live in their mother's basement and didnt graduate from a top 30 college.


August 21, 2010 9:27 PM

In America democracy is long gone now it the time of Corporationism by the corporation for the corporation
It started from the bush deregulation era , Obama also support the same policy nothing has changed.

Joe Coder

August 22, 2010 2:39 AM

Don't blame the Indians, don't blame the Chinese, don't blame the Mexicans. Blame the US government for making the cost of business so high that all virtually all American manufactuing was gone offshore by the 1980s. And now services are in pretty much the same shape.

Taxing companies and Americans to death is a bad policy, and you can't argue with failure. The economy is in the dumpster and will probably never recover, and it's all because of greedy politicians and bloodthisty MBA CEOs that just go from one company to another, sucking the life out of each one.

I remember when people spent money to hire the best talent, realizing good people are worth a thousand times more than you pay them. Now there's no service, no productivity, no nothing, all because you want to look good on your filings and keep your investors happy.

This is a shortsighted and ignorant policy. Just because you got away with it doesn't matter, because you ruined hundreds of thousands or even millions of American lives and destroyed the economy. What goes around comes around. Enjoy your day on the back nine in Bangalore. All the American gold courses will soon be closed forever.


August 22, 2010 5:06 AM

Maybe Indians should boycott American Goods, so these people who object to Indian services, should expect Indians to not to buy American services


August 22, 2010 9:46 AM

All these crying protection for their jobs forget that US multinationals are responsible for millions of job loss for poor in third world countries. Where were you when all the US manufacturing jobs were sent to China?

Dont forget that China and India will be no 2 and 3 economies in the world. And it is in your interest to increase economic relations with those countries. What will happen if india charges 10cents on every bottle of coke and pepsi? What will happen if they put additional 10% tax on Boing or Lockheed for bid of 126 fighter planes? What about tax on US companies trying to sell nuclear plants?

On one hand you want to fruits of free markets when it benefits you. But then you want your govt to protect you when the same market forces impact you.


August 22, 2010 10:01 AM

To all those who oppose H1B/L1, free flow of products go with free flow of labor. What will happen if india charges 10% tax on boing/lockheed martin on bid for 126 fighter planes? What about tax on US companies for nuclear plants which can be 150 Billion USD market. China and India will be 2nd and 3rd largest economies in the world and will be growing at 10% for decades. If your companies want to access these markets (which they really want to grow), you will have to allow free flow of labor.

And dont forget. These companies bid openly for work and awarded work by your executives who are americans.


August 22, 2010 10:30 AM

There should be a 50K/yr. H-1B surcharge on each foreign worker. Companies will be willing to pay the surcharge if there is truly a shortage of skilled workers. If companies are trying to pay lower wages, then this would weed them out. Finally, the collected fees would go towards retraining US workers, and companies would be more likely to retrain their own US employees rather than pay the 50K. In the end, everyone wins, and the 50K can be adjusted according to economic conditions, higher now for example due to the recession.

John D Programmer

August 22, 2010 11:42 AM

Of course they claim demand is growing, denial is the first stage in the road to acceptance. More of this is coming, it's only the first move in cutting off the air to the outsourcing scam. The government finally recognizes that something must be done. When it's all over, we'll all be watching to see how well india does without the US IT corps supporting it's cheap labor racket.


August 22, 2010 2:19 PM

with 10%-30% the unoffical rate, then you can imagine what the unofficial rate is.

frankly Im shocked that it took 3 years since the crash for this to be an issue for politicians and the public.

Im also shocked their only raising it by $2,000. They should have raised by atleast $5k-$10k which would represent about 50% of the wage differential.

The real shock is how americans have been so brainwashed by republican corporatist free traders and democratic immigrationist that no one we are voting for (Like Ron and Rand Paul) has any concern for our nation. Everyone is thinking in terms of globalism.


August 22, 2010 7:20 PM

Indian companies should hire Indians first. If these jokers in Congress don't like it, then India should tighten the screws on American companies wanting a share of the Indian market. The retaliatory squeeze on the American companies will put margin pressures on the US corps. forcing them to layoff more American workers.

Maybe, the jokers and the xenophobic American masses will see the light then.

Myopic Chuck Schumer

August 22, 2010 9:39 PM

Chuck Schumer might be suggesting that India should stop the McDonalds, Coca Coila, Pepsi, Starbucks, Wal-Mart (who is planing big) and others all from doing business in India simply because they are taking market share of Indian companies. Just like TCS & Infosys is taking market share of US companies.


August 22, 2010 11:38 PM

Shumer started well and then of course screwed it. You need to charge at least a difference between what average american IT worker makes and Indian "import". I would say $40-50,000 a year would be reasonable. Outsourcing also can be easily addressed. Indian "IT" bleeds out about $80-100 billion a year from US. IBM became Indian Business Machine with its 200k Indian workforce... US behaved all this time as a cheap whore..

STOP H1B and L1s Now!

August 22, 2010 11:46 PM

Our currnet Policies are enriching only the CEOs and Excutives. Our middle class is disappearing fast! Jobs are outsourced by the greedy Coporations fatser than ever! And whatever jobs left here, they want to fill them with H1bs and L1s. Our Politicians (both Republicans and Democrats) and the Greedy Corporations and destroying this country! It is time for a Third Party! That $2000/- is a Joke! It should be 50K/year fee.

Common Sense

August 23, 2010 6:40 AM

It has always amazed me that the India-only "global" crowd argues that American products should not be sold in their country unless we allow India to export its slaves to the U.S. Why do Indians devalue themselves by comparing themselves to sodas?!

Selfish motives

August 23, 2010 11:50 AM

Lot of people here are so selfish about the comments. They think Indians are taking their jobs. They think how these companies will do without US companies.
There was a shortage of IT skilled employees in US and thats why the trend started. And still there is a shortage of Americans following IT degree. Also why just stop India. Stop manufacturing in China. We will see what happens. Only 0.4% of US workforce is on H-1 or L-1 but 90%of goods are manufactured including SMARTPHONES. Stop that and get manufactured in US. We will see what people will say when they have to pay double the price of same goods. They like gng to dollar stores without thinking where the good are coming from. Stop exporting American good to other countries including ammunition . Nobody wants to do that. People don't like the true facts. They just think its talking our jobs. The same is the case with doctors and nurses. Nobody want to work hard and educated them self. Everybody wants a easy way out. Get a better degree and u will get a job. World is changing and so you have too. Have people ever thought why people from world come to US for advanced degree and spend 40,000-100,000 on eductaion here. Go to any technical school here and 60-70% are from other countries. This shows why Americans dont get It jobs since they have dont have enough skills. So rather than criticizing everyone, try to improvise ourself.


August 23, 2010 2:31 PM

If an Indian software developer can do the same work with the same quality for $30,000 per year, why in the world should anyone else be paid $100,000 per year for doing the same thing. I know Americans keep claiming shoddy work by the Indians by blowing up isolated cases, but frankly, my experience in 10+ years is the overall quality and commitment is as good or better than their pampered Western counterparts.


August 23, 2010 2:37 PM

Did you guys know that the Indian nuclear industry is worth > $20 billion over the next 5-10 years? Did you guys know that the aviation industry (including improving airport facilities, buying up new aircraft etc.) in India is worth another $20+ billion over the next decade? Did you guys know that India's infrastructure development area is worth > $50 billion over the next decade. All this in today's costs - imagine India's inflation is rising at 5-10% p.a. Also imagine India shutting out the salivating American companies from participating in this near term bonanza. Don't be short-sighted wimps.


August 23, 2010 4:06 PM

According to a study on employment by the Indian Planning Commission, 44% of workers in 1999-2000 were illiterate and a further 22.7% had schooling only up to primary level. Despite India's much-vaunted educated youth, what's in the pipeline does not inspire confidence. Only about 33.2% of the labor force had achieved schooling up to middle level (eight years of education) and above.

Ed 'Too Tall' Jones

August 23, 2010 5:16 PM

US policies have intentionally increased the percentage of foreign students in US science and engineering (S&E) programs for decades;

"A growing influx of foreign PhDs into U.S. labor markets will hold down the level of PhD salaries to the extent that foreign students are attracted to U.S. doctoral programs as a way of immigrating to the U.S.A...A number of [the Americans] will select alternative career paths... For these baccalaureates, the effective premium for acquiring a PhD may actually be negative."

Why couldn't US policies increase the percentage of Americans in S&E programs across AMERICAN campuses? Why shouldn't Americans demand just that?

H-1B is supposed to allow US employers to hire specialized guest-workers, on a temporary basis, when no qualified US workers are available. This is not to be confused with attracting the worlds 'best and brightest' - they already have their own visa, the O1 visa. O1 visas for persons of 'extraordinary ability' have no quota.

India is not even among Americas top 15 export markets.

If enacting policies beneficial to the nations citizens equals 'racism', 'xenophobia' and 'protectionism' - what does that say about India?

Why can't the US have a work visa policy identical to India's?


August 24, 2010 1:52 AM

The USA should do the same for the H-1 visa and L-1 visa as the Indian government is doing with its worker visa.
India government want to stop the hiring of foreign workers inside India in order to give job to the local Indian. The USA should follow the Indian example! Fair to the American workers!
New Delhi: Indian visa rules have been set on a par with the global best practices. The government has tightened the employment visa rules to distinguish these from the liberal rules for the business visa. This has been done primarily to prevent companies from misusing the business visa.

The new rules make it necessary for expatriate workers, including those from China, to re-enter India for completing their existing assignments only on an employment visa.

“Request for employment visas for jobs for which a large number or qualified Indians are available should not be considered,” the ministry of commerce and industry has stressed in a missive to clarify the government stand on visas to foreign nationals. From now on, employment visas for clerical, routine and secretarial jobs will also not be granted. The ministry of external affairs has been asked to brief Indian missions abroad on the changed norms, so that they use suitable discretion in granting employment visas.


August 24, 2010 11:49 PM has been talking about the inconsistencies for a long time. Since then, a third of h1b consultancies have went under. Some of the scams run by the major companies setting up offshore sweatshops is revealed. A consultancy company website has turned into a blog for the owner, who is vehemently opposed to Indian workers ruining the wages of local Americans.

Very High Rate of H-1B Visa Fraud

August 25, 2010 8:11 AM

A study finds that 13% of the visa petitions for U.S. employers to bring in skilled foreign workers are fraudulent. A report released Oct. 8 by the U.S. Citizenship & Immigration Services (USCIS) reveals that 13% of petitions filed for H-1B visas on behalf of employers are fraudulent. Another 7% contain some sort of technical violations. The study, released to members of the U.S. Senate Judiciary Committee, marks the first time the agency, part of the Homeland Security Dept., has documented systematic problems with the controversial program. Technology companies, in particular, have come to rely on the H-1B visa program to bring in Cheap Labor Workers to fill jobs that employers claim can't be filled with U.S. candidates. H-1Bs help U.S. companies replace American workers with less costly cheap cheap foreign workers. "The report makes it clear that the H-1B program is rife with abuse and misuse, instances of abuse represent the tip of an iceberg of deeper problems with the visa program.


August 30, 2010 1:32 AM

To all Indians,

Please return back to India .Its been 63 years since Indian independence. It time to get together and restore India its original fame that it had before British Invasion

Taj Mahal

September 1, 2010 12:33 PM

If American workers weren't so fat and obese and cost so much in health insurance, we might see more american "non-whiners" working with us.


September 1, 2010 2:35 PM

At the present US be never competitive with the Indian Economy, Biggest Assert of India Economy and China Economy is Manpower,Technically Better than US. Indians are more creative but unfortunately the world is doesn't recognized its patent system.
But US economy is nothing without Asian Economy.
Indian Silicon valley is growing bigger than US silicon Valley
Its Sure that in the Next Ten Years
the India will be ranked at First may be Second,US will be the Third Economy Country as per survey.
Any Way Most economic ppl and Corporates Still interested on Indian Economy and its employee.


September 2, 2010 9:30 AM

Any hungry lawyers out there looking for glory?

Pursuing the following idea would even be socially useful, not like those lawyers you read about suing companies for having an expired patent number printed on their products.

Improving the U.S. education system, while a laudable goal, does NOT fix this problem. There are a million or more un-or-under employed engineers and IT people that are already very well educated.

A better fix would be for someone to initiate a class-action lawsuit challenging the constitutionality of the H1B visa under the 13th Amendment to the U.S. Constitution (the amendment that freed the slaves).

An H1B employee is "out of status" if they are laid off, and is required to leave the country immediately. There is no statutory "grace period".

This gives an employer the power to threaten an employee with IMMEDIATE DEPORTATION. The employer is not, of course, directly ordering the deportation, they are merely making the employee subject to immediate deportation by the U.S. government.

In United States v. Kozminski, 487 U.S. 931 (1988), the Supreme Court of the United States ruled that the Thirteenth Amendment circumscribed involuntary servitude to be limited to those situations when the master subjects the servant to:

1. threatened or actual physical force,
2. threatened or actual state-imposed legal coercion or
3. fraud or deceit where the servant is a minor, an immigrant or mentally incompetent.

The federal anti-slavery statutes were updated in the Trafficking Victims Protection Act of 2000, P.L. 106-386, which expanded the federal statutes' coverage to cases in which victims are enslaved through psychological, as well as physical, coercion.

Being put "out of status", subject to immediate deportation, is a form of "threatened or actual state-imposed legal coercion".


September 3, 2010 11:34 AM

Total number of people working in UA on H1 and L1 will be less than .01% of the workforce. If you only consider the IT professional coming from India alone it will be even lower. Not sure whats impact it going to have on the unemployment figures by just manipulating this miniscule number.

Battery online store

September 5, 2010 11:45 PM

Some affirmation that the H-1B affairs helps to actualize American jobs, but it is currently actuality acclimated by some companies to outsource American jobs to adopted countries. Under accepted law, an outsourcing aggregation can use American workers to alternation H-1B guest-workers, blaze the American workers and outsource the H-1B workers to a adopted country area they will do the aforementioned job for a abundant lower wage. In fact, Indian Commerce Minister Kamal Nath has referred to the H-1B as “the outsourcing visa.”

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