Bangalore: The Indian IT industry is angry at the latest US law that increases the visa fee on its skilled workers to share the healthcare burden from 9/11.
"It's a retrograde step targeting the Indian IT industry again to meet the healthcare costs in the US. It is a disappointing move," Infosys Technologies Ltd chief executive S Gopalakrishnan told IANS.
The James Zadroga 9/11 Health and Compensation Act will create a multi-billion dollar fund by continuing an increased fee on certain categories of H-1B and L1 visas for skilled workers, that would mainly impact Indian IT companies, and the continuation of a fee on some travelers to this country.
It aims to provide free medical treatment to those who are suffering from illnesses that they contracted while working at Ground Zero in the weeks following the September 11, 2001 terrorist attacks on the World Trade Center in New York.
The bill may erode the profitability of Indian IT companies, among others, as it seeks to raise funds by continuing an increased visa fee regime for skilled workers. India has slammed the move as "retrograde"
"The latest protectionist move is inconsistent with the ethos that were exchanged during the visit of US President Barack Obama to India," Wipro executive vice-president Suresh Senapathy said.
Coming as it does after the visa fee was hiked on Indian techies in August to fund border security, the new healthcare law seeks to meet the treatment of those suffering from illness contracted while clearing the debris of the terror-struck World Trade Centre at the Ground Zero in New York.
"As long as unemployment is high, there will be pressure on politicians and government to do something to show that they are concerned over the situation. Unfortunately, their focus is on immigrants," Gopalakrishnan said.
Dismayed over the move to even levy two percent cess on imports, Senapathy said the IT industry hoped that the Obama administration would take steps not to let the healthcare bill pass through the legislation.
"The consolation is the new Act will be applicable for five years (till 2015) as against the 10-year timeframe stipulated in the bill," Senapathy said.
Echoing the concerns of the IT bellwethers and other firms in this tech hub, Nasscom president Som Mittal said the industry representative body did not expect the bill to be enacted into law so soon as the Indian position was already conveyed to the US government.
"Though the bill was in the knowledge of our government and the industry, we thought it may not go through in such a hurry, as the US Congress session was to break for Christmas and year-end holiday season," Mittal said.
Regretting that the US lawmakers were targeting the technology sector and overseas companies each time they have to fund new schemes due to huge deficit budget, Mittal said the 9/11 Health and Compensation Act would impact the Indian IT companies and hurt their bottomline, as they have to absorb the additional cost.
On Wednesday, the US Congress approved the bill to fund healthcare for emergency workers involved in rescue and clean-up efforts during the 9/11 terror attacks in New York.
While the Senate passed the bill with unanimous consent, the House of Representatives voted on the bill late Wednesday evening 206 to 60.
The bill, that will require an estimated budget of USD 4.3 billion over a 5-year period, now moves to the White House for US President Barack Obama to sign into law.
The bill is fully paid for by a two per cent fee on government procurement from foreign companies located in non-GPA countries and a one-year extension of H-B 1 and L-1
Visa fees for outsourcing companies; besides an extension of Travel Promotion Act fees. These are estimated by Congressional Budget Office to collect USD 4.59 billion over the 10-year scoring period for the bill.
"The amended bill before us today also changes how the two programmes are paid for by a two per cent fee on government procurement from foreign companies located in nongovernmental procurement, and a one-year extension of H1-B and L-1 visa fees for outsourcing companies," said Nancy Pelosi, Speaker of the US House as the bill breezed through the Congress.
However, the passed bill was a much toned down version given that the initial proposal was to extends the increase in fee hike on H-1B and L1 visa for six years.