Bangalore, Stymied by the Visa Shortage, Hires in the U.S.

MindTree (MTCL), an Indian outsourcing specialist Bangalore, has 11,000 employees work for customers in banking, insurance, and industries. Most are in India. But the company sometimes wants those workers to be close the clients, MindTree has 850 employees in U.S., working in 36 different states. Some are U.S. citizens or green card , but about 60 percent have entered the country one of two types of work visas. With the U.S. unemployment higher than 8 percent, and Indian outsourcing already issue in the presidential election, those visas are getting harder secure. “Rejection rates are up,” says Scott Staples, president of MindTree’s U.S. operation. “It’s much harder to get visas approved.”

Executives other Indian outsourcers face similar problems. Big companies as Tata Consultancy Services (TCS), Infosys (INFY), and Wipro (WIT) become global outsourcing powers. Most of their workers are in Bangalore, Mumbai, and Indian cities, but, like smaller rival MindTree, largest companies also need to have employees the ground for “onshore” work. To get these workers the U.S., companies rely several types of visas. One is the H-1B, the U.S. reserves for people with specific types of training. Another is the L-1B, for employees specialized knowledge.

Getting those visas has become lot trickier. Rejection rates, which were around 10 percent five years , are now as high 50 percent, says Ajoyendra Mukherjee, executive vice president and head of global human resources Tata, India’s largest IT services company. Nasscom, the Indian IT services industry’s trade organization, is lobbying a relaxation of the rules that govern visa applications. The rejection rates “add immensely the uncertainty of our business,” says Som Mittal, Nasscom’s president. “We are never sure why somebody will approved or not.”

Indians are upset other U.S. policies affecting the outsourcing industry, . For instance, Prime Minister Manmohan Singh’s government last month a complaint with the World Trade Organization a 2010 U.S. law that doubled the fees Indian companies pay work visas. Indians also say the U.S. made the application process for H-1B visas difficult by demanding that applicants provide new information as testimonials from professors. Over the three years, consulate officers have asked for “too information which is very difficult to provide,” says Mittal. “It’s onerous.”

Companies are pushing the Obama administration ease up—and they’re enlisting corporate allies in the U.S. In March, 64 companies, Boeing (BA), Procter & Gamble (PG), General Electric (GE), and Microsoft (MSFT), wrote to President Obama “unprecedented delays” caused by what they “an inconsistent and improperly narrowed definition” of what constitutes the type specialized knowledge needed an L-1B visa. The stricter interpretation of the rules back to early 2011, says Jay Ruby, a partner in Atlanta Ogletree Deakins, the third-largest immigration law in the U.S. With the new definition of specialized knowledge, he says, the government is “essentially restricting eligibility to handful of people.”

Indian companies considering such alternatives as employing more locals. Tata hired 1,600 people in the U.S. last year, up from 1,200 in 2010. the unemployment rate high, the pressure visas is “inevitable,” says MindTree’s Staples, predicts a decline the company’s use of work visas. MindTree plans to hire 400 people a new center in Gainesville, Fla., and Staples expects to open more centers in the U.S. “If visas become to get,” he says, “we have the ability accelerate that.”


Adapted and abridged from: businessweek.com, June 26, 2012.