India's Tech Exports Figures Over-inflated

[Riaz Haq]

A 2005 study by US General Accounting Office (GAO) found that Indian government's figures for software and technology exports to the United States were 20 times higher than the US figures for import of the same from India.

U.S. General Accounting Office looked at the 2003 data showing the United States reported $420 million in unaffiliated imports of BPT (business, professional, and technical) services from India, while India reported approximately $8.7 billion in exports of affiliated and unaffiliated BPT services to the United States.

US-India IT Trade Discrepancy Source: GAO

The GAO found at least five definitional and methodological factors that contribute to the difference between U.S. and Indian data on BPT services. First, India and the United States follow different practices in accounting for the earnings of temporary Indian workers residing in the United States. Second, India defines certain services, such as software embedded on computer hardware, differently than the United States. Third, India and the United States follow different practices for counting sales by India to U.S.-owned firms located outside of the United States. The United States follows International Monetary Fund standards for each of these factors. Fourth, BEA (Bureau of Economic Analysis) does not report country-specific data for particular types of services due to concerns about the quality of responses it receives from firms when they allocate their affiliated imports to detailed types of services. As a result, U.S. data on BPT services include only unaffiliated imports from India, while Indian data include both affiliated and unaffiliated exports. Fifth, other differences, such as identifying all services importers, may also contribute to the data gap.

In theory, India follows what is known as BPM 6 (MSITS) reporting method for software and information-enabled technology services (ITES) which counts sales to all multinationals, earning of overseas offices, salaries of non-immigrant overseas workers as India's exports. In practice, India violates it. BPM 6 allows the salaries of first year of migrant workers to be included in a country's service exports. India continuously and cumulatively adds all the earnings of its migrants to US in its software exports. If 50,000 Indians migrate on H1B visas each year, and they each earn $50,000 a year, that's a $2.5 billion addition to their exports each year. Cumulatively over 10 years, this would be $25 billion in exports year after year and growing.

There has neither been any acknowledgement nor any correction of the Indian government's methodology for reporting software and IT services exports since the GAO report was published in 2005. This raises serious questions about the accuracy of India's claims of $60 billion to $70 billion IT software and service exports being currently reported. If the 20X exaggeration still persists, the Indian IT exports could be as little as $3 billion to $4 billion today based on the US methodology.

Pakistan IT Exports BPM 5 Method Source: State Bank of Pakistan

Unlike the Reserve Bank of India's claimed BPM 6 methodology, the State Bank of Pakistan uses a much more conservative BPM 5 reporting system which does not include sales to multinationals located in Pakistan and earning of overseas offices and salaries of non-immigrant Pakistani overseas workers in Pakistan's exports figures. If the State Bank switched to BPM 6 method, Pakistan's software and IT exports of $294 million for 2012-2013 could easily become at least $5 billion.

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[Riaz Haq]

Here's a news report that helps understand why some Indian IT companies overstate exports to claim tax exemptions:

Did IBM India export software in 2008-09? Though the company says it did, the claim may not run deep as telecom service companies have said that they did not give any leased lines to IBM India to enable the IT giant to export its software.

Software is generally exported through leased lines — dedicated cables — that transmit data and connect the seller to the buyer in different locations. The telecom service providers’ statement during the tax department’s probe is significant in light of the income tax department’s notice to IBM India last week for evading crores of rupees in taxes under an export promotion scheme.

In response to dna’s questionnaire, IBM India did not specifically respond to queries on leased lines and its foreign bank account. However, the company’s spokesperson said: “IBM does not agree with the tax department’s claims and will aggressively defend itself through the appropriate judicial process.”

IBM India not only under-reported revenue of Rs7,288 crore in 2008-09 to evade tax to the tune of Rs5,357 crore but it also showed sales in India as exports to claim tax exemption under the STPI scheme, according to the tax department. Under the Software Technology Park of India (STPI) scheme, IT companies are eligible for 100 per cent tax exemption on income generated from software exports as defined in section 10A and 10B of the I-T Act 1961 or under 10AA if they are located in a special economic zone (SEZ). IBM India has several units in STPIs and SEZs across the country that claim tax exemption on income from software exports.

IBM India claimed that it had exported software in 2008-09. But telecom companies, VSNL (Tata) and AT&T and others, denied providing leased line services to IBM India to export software from their eligible Software Technology Park of India or special economic zone locations, such as in Bangalore, Hyderabad, Gurgaon, etc. Rather, the companies gave it connection only within the country, according to the tax department’s notice.

In order to milk the export promotion scheme, IBM India also violated the Foreign Exchange Management Act and deceived the Reserve Bank of India. These and other violations came to light after the tax department initiated a thorough probe into the company’s affairs when IBM India failed to furnish software development agreements, software export forms (softex) despite several summons and show cause notices. The investigation reveals that thousands of invoices submitted by IBM India to STPI and SEZ authorities were different from the invoices referred to in its HSBC bank account in New York in which sale proceeds were credited. The department suspects these to be “bogus invoices”....

http://www.dnaindia.com/india/report-ibm-india-exported-software-mi...

[Riaz Haq]

Lots of inflated claims of Indian "accomplishments" in America have been debunked by Times of India Washington correspondent Chidanand Rajghatta.

It seems exaggerating achievements is a common Indian trait. Even the Indian government does it shamelessly as evident from highly inflated IT exports figure.

Here's a Times of India story on Indian exaggeration of Indian professionals in US:

It's an Internet myth that has taken on a life of its own. No matter how often you slay this phony legend, it keeps popping up again like some hydra-headed beast.

But on Monday, the Indian government itself consecrated the oft-circulated fiction as fact in Parliament, possibly laying itself open to a breach of privilege. By relaying to Rajya Sabha members (as reported in The Times of India) a host of unsubstantiated and inflated figures about Indian professionals in US, the government also made a laughing stock of itself.

The figures provided by the Minister of State for Human Resource Development Purandeshwari included claims that 38 per cent of doctors in US are Indians, as are 36 per cent of NASA scientists and 34 per cent of Microsoft employees.

There is no survey that establishes these numbers, and absent a government clarification, it appears that the figures come from a shop-worn Internet chain mail that has been in circulation for many years. Spam has finally found its way into the Indian parliament dressed up as fact.

Attempts by this correspondent over the years to authenticate the figures have shown that it is exaggerated, and even false. Both Microsoft and NASA say they don't keep an ethnic headcount. While they acknowledge that a large number of their employees are of Indian origin, it is hardly in the 30-35 per cent range.

In a 2003 interview with this correspondent, Microsoft chief Bill Gates guessed that the number of Indians in the engineering sections of the company was perhaps in the region of 20 per cent, but he thought the overall figure was not true. NASA workers say the number of Indians in the organization is in the region of 4-5 per cent, but the 36 per cent figure is pure fiction.

The number of physicians of Indian-origin in the US is a little easier to estimate. The Association of American Physicians of Indian Origin (AAPI) has 42,000 members, in addition to around 15,000 medical students and residents. There were an estimated 850,000 doctors in the US in 2004. So, conflating the figures, no more than ten per cent of the physicians in US maybe of Indian-origin – and that includes Indian-Americans – assuming not everyone is registered with AAPI.

These numbers in themselves are remarkable considering Indians constitute less than one per cent of the US population. But in its enthusiasm to spin the image of the successful global Indian to its advantage, the government appears to have milked a long-discredited spam - an effort seen by some readers as the work of a lazy bureaucrat and an inept minister.

The story has attracted withering scrutiny and criticism on the Times of India's website, with most readers across the world trashing it. "The minister should be hauled up by the house for breach of privilege of parliament (by presenting false information based on hearsay). We Indians are undoubtedly one of the most successful ethnic groups in USA, be it in Medicine, Engineering, Entrepreneurship. BUT, that does not translate to those ridiculous numbers that have been presented....this is a circulating e-mail hoax," wrote in Soumya from USA, who said he worked at the NASA facility in Ames, California, and the number was nowhere near what was mentioned in the figures given to Parliament.

http://articles.timesofindia.indiatimes.com/2008-03-12/us/27742502_...

[Riaz Haq]

Here's Hindu BusinessLine report on cloud computing apps in Pakistan:

Emerging markets such as Pakistan, Vietnam, the Philippines and Malaysia are adopting cloud-based applications at a faster rate than India, according to Doug Hughes, Vice-President, Product Management (JAPAC), Application Development, Oracle, the $35-billion US-based IT company.

In the last few years, India has moved to a dominant market from an emerging market. However, countries such as Pakistan and Malaysia are challenging India by deploying cloud rapidly. Starting with a low base, cloud-based application gives them the flexibility not to invest in hardware or software but to rent them on a monthly basis, he told Business Line.

However, adoption of cloud-based applications in India is faster than in China, he said without giving any data.

While small- and medium-size Indian companies are embracing cloud, there is hesitancy among large companies on security concerns. Bridging the gap between conventional cloud solutions and traditional company applications is emerging as a growing trend across segments, he said.

Managing consulting company Zinnov said cloud computing market in India is expected to reach $4.5 billion by 2015 with SMEs driving the growth.

The bigger the company, the bigger the decision making team. New customers are willing to consider cloud, but not the old ones. “We need to address too many questions raised by big companies especially on security. We need to find within big businesses a few champions who truly believe on cloud. For small business I do not need as they are the champions,” said Hughes. Oracle offers applications in a public, private or hybrid cloud, he said.

“With a large customer we start the discussion with the success in Australia. They will listen to it but say show me somebody who has done here. If it is not done here, it does not exist. I cannot say why clients here do not feel ready. The challenge is how to make them comfortable with cloud,” he said.

Companies need not deploy the entire suite of cloud-based solutions but pick up a HR or supply chain management application. Oracle is not going behind customers to change the entire spectrum of customer base from the very large company to the smallest – consider cloud as a solution, he said.

http://www.thehindubusinessline.com/industry-and-economy/info-tech/...

[Riaz Haq]

Here's hedge fund manager Jim Rigers on India as reported by LiveMint:

Singapore: Hedge fund manager Jim Rogers has always been an India bear and a critic of the policies of the Indian government. The chairman of Rogers Holding who moved to Singapore in 2007 because he believes the centre of the world is moving to Asia, lashes out in an interview at both national political parties and dismisses Goldman Sachs’ recent report on how it was turning bullish on India because of the possibility that the Bharatiya Janata Party’s (BJP’s) Narendra Modi could be the country’s next prime minister. “I won’t invest in India” till the country opens up more, said Rogers. Edited extracts:
What do you think of the whole controversy regarding the Goldman Sachs report titled “Modi-fying our view: raise India to Marketweight”. Do you agree with what the brokerage firm said on change?
Firstly, India has been badly managed for the past 60 years. I am not talking about just the two main parties in India—get rid of all the politicians. Who knows as to who is the worse between the ruling party and the opposition. Both Congress and BJP have not been and will not be good for India, until they completely open its economy and catch on to how the world really works. India will continue to suffer—I am not saying that the opposition will be better. Everybody who has had anything to do with running India in the past so many years have failed India.
Now, it is a different issue if Goldman Sachs be allowed to comment. If they can’t comment, then can newspapers from outside (India) be allowed to comment? What Indian politicians are saying if you criticize is that you can’t comment if you are an outsider. That is one of the problems for India, and this is why India has been a disaster for so long. It keeps fouling up—telling anybody they cannot criticize or comment is a terrible, terrible mistake for India. Does that mean only Indian media can comment on what is happening there? Are politicians trying to say you can’t comment unless you agree with what they say? I find India’s reaction to the Goldman Sachs report ludicrous. I’m no fan of Goldman Sachs, but India’s reaction to the report is embarrassing. Indians should be embarrassed to have politicians who react like that to a report.
Has the BJP said or done anything revolutionary, or said anything different? They say we like business people better than Congress, but can they do anything other than making some cosmetic changes? Yes, if they (BJP) win, Goldman Sachs will be happy; they can buy stocks and markets will go up. But a year later everyone will look around and say that nothing has changed. It will still be impossible to do business in India unless you are in bed with politicians and bureaucrats. It will still be impossible for people to buy and sell currencies the way they want to…. I can buy gold nearly anywhere in the world, but not in India because I am foreigner. What kind of garbage is that?...

http://www.livemint.com/Companies/b4EhUDAftUAdTquWxdv2GP/Jim-Rogers...

[Riaz Haq]

Here's an ET story on SMS award for Election Commission of Pakistan:

The Election Commission of Pakistan has won its first ever international award today, as an international parliamentary organization acknowledged its services for promoting democracy during the elections.
The win was announced at the International Electoral Awards 2013 held in Kuala Lumpur, Malaysia.
The ECP was nominated for this award by the International Centre for Parliamentary Studies on its launching of services for millions of voters to verify their votes through the ‘8300 SMS Service’ prior to the May 2013 elections.
The ECP won the Accessibility Award, beating other finalists, the Republic of the Philippines Commission on Elections and the Independent Electoral Commission of South Africa.
“Khizer Aziz, Director General IT, today, received an award in Malaysia,” a senior ECP official told The Express Tribune.
The ECP also received applause from several other parliamentary organizations on its active role for conducting fair polls in Pakistan.
The winning system
In a bid to remove errors from electoral lists, the Election Commission of Pakistan had launched an SMS service to facilitate 85 million voters to verify their votes before the general elections this year.
The service had been launched in collaboration with the National Database and Registration Authority to help registered voters check the status of their votes and other particulars.
Registered voters could send their Computerised National Identity Cards (CNIC) number without hyphens via SMS to 8300 at anytime from anywhere in the country.
After sending the SMS, the voter would subsequently receive a message containing their name, village, city, tehsil or district, location (electoral area) and the serial number of vote registered in the preliminary electoral rolls. The system later also provided the address of their polling station.
Usage
More than 51.8 million citizens used the SMS service to verify their voting information ahead of the May 11 polls.
A whopping 29.2 million voters between the ages of 18 and 35-years-old used the service, according to details provided by NADRA. Over 10.4 million people belonged to the 36 to 46-year-old age bracket, 6.7 million from 46 to 56-years old, 4 million voters from the 56 to 66 age bracket and 1.5 million from the age of 66 and above.
Some 28.8 million voters hailed from urban areas and 23 million voters from rural areas.

Earlier, the ECP had been nominated for launching the “World’s Biggest Voters SMS Service” of over 83 million data density and for over 100 million mobile users in the country in ‘one go” by the Guinness World Records.

http://tribune.com.pk/story/641092/ecps-8300-sms-system-wins-intern...

[Riaz Haq]

A GAO study showed that U.S. data on offshoring of services to India are more than 20 times smaller than India’s data. What’s the story?

The GAO study showed that U.S. imports from India of business, professional, and technical (BPT) services as published by BEA are substantially lower than India’s data on exports of BPT services to the U.S. (chart 1, left panel).¹ However, when adjusted to a similar conceptual basis using information from the GAO report, the difference is actually quite small (chart 1, center panel). 

The large gap between the U.S. and Indian data mainly reflects differences in how BEA and India define BPT services. BEA data are consistent with international standards for balance of payments accounting; India’s data, which are based on data from an Indian trade association, do not conform to international standards.  In fact, a 2005 study published by the Reserve Bank of India (RBI) showed that computer services exports (a large component of BPT services) to the U.S. based on international standards are much lower than India’s published data (chart 1, right panel).² In addition, a 2004 report by the OECD found that 97 percent of India’s exports of computer services to large OECD member countries were unaccounted for in those countries’ data on imports.³ 

Depending upon how one adjusts for important definitional differences, the gap between the U.S. and Indian estimates either entirely disappears or is substantially reduced.

Chart 1: U.S. and Indian Data on Trade in BPT Services, 2002 
 
Source: GAO; calculations by BEA

¹ Government Accountability Office, “U.S. and India Data on Offshoring Show Significant Differences,” October 2005.

² Reserve Bank of India, “Computer Services Exports from India: 2002-03,” Reserve Bank of India Bulletin, September 2005.

³ Organization for Economic Co-operation and Development, Information Technology Outlook 2004, October 2004.

 

What are the reasons for differences between U.S. and Indian data on trade in business, professional, and technical services? 

The U.S. and Indian data on trade in business, professional, and technical (BPT) services are not directly comparable because of substantial definitional differences.  When the U.S. and Indian data are adjusted for definitional differences, the difference in estimates either entirely disappears or is substantially reduced.  Some major definitional differences are:

      Indian workers in the United States.  India’s data on trade in BPT services include services provided by Indian nationals who reside in the United States.  BEA follows international standards for balance-of-payments accounting by excluding the compensation paid by U.S. firms to U.S. residents.  Foreign workers who are in the United States for less than one year are considered to be foreign residents, and typically their earnings are included as compensation of employees (under “income” in the balance of payments accounts).  Workers who are in the United States for more than one year are considered to be U.S. residents, and so their earnings are excluded from the balance of payments accounts.  According to the GAO study, Indian officials acknowledged that temporary Indian workers in the U.S. have accounted for about 40 to 50 percent of their data on exports of BPT services.

 

b)      Sales through affiliated companies.  India’s data on services exports to North America include sales of services to affiliates of U.S. companies located in India or another foreign country, as well as sales by affiliates of Indian companies located in the United States to other U.S. residents.  According to international standards, BEA excludes these sales from U.S. trade in services because the transactions did not occur between a U.S. resident and a non-resident.  A U.S. company’s foreign affiliate that is located in India is an Indian resident, and so its transactions with other Indian residents should not be included in the balance of payments.  Similarly, an Indian company’s affiliate in the United States is a U.S. resident, and so its transactions with other U.S. residents should not be included. According to the GAO study, an Indian official stated that inclusion of sales to affiliates of U.S. companies is “likely a significant factor” accounting for differences between U.S. and Indian data.

 

c)      Sales of goods.  India’s data on trade in BPT services include some sales of goods, such as prepackaged software and software embedded on computer hardware.  The U.S. data on trade in these products are included in the goods trade data, not in the services trade data.  According to the GAO study, Indian officials stated that embedded and prepackaged software account for about 10-15 percent of India’s estimate of exports of BPT services to the U.S.

 

d)      Sales of technology-enabled services.  India’s data on trade in BPT services include some technology-enabled services (such as some financial services).  BEA includes these services in other services categories.

 

e)      Intrafirm trade.  Through 2006, U.S. data for trade in services are collected separately for cross-border trade between unaffiliated companies and for intrafirm (or affiliated) trade.  The surveys that BEA uses to collect data on unaffiliated trade are detailed enough to allow BEA to identify trade in BPT services vis-à-vis India.  Affiliated trade, however, is collected on separate surveys, and data for individual foreign countries that separately identify BPT services are unavailable.  Therefore, reported BEA data for BPT trade with India cannot be directly compared with the Indian data, because BEA’s data for BPT services include only unaffiliated trade and India’s data on BPT services include both affiliated and unaffiliated trade.

 

How did BEA calculate the adjusted data shown in the chart above? 

BEA adjusted both its own estimates and the Indian estimates to eliminate definitional differences between U.S. and Indian data. 

BEA adjusted its own data to include an estimate of affiliated transactions, which are collected on surveys that do not allow for BPT services to be separately identified by individual foreign country. In order to estimate affiliated imports of BPT services from India, BEA used a ratio calculated from global affiliated and unaffiliated imports of BPT services. BEA used the same procedure to estimate affiliated imports of computer services (table 1). 


Table 1: Adjustments to BEA’s data, 2002 
[Millions of dollars] 
 

		BPT Services	Computer Services
Published BEA estimates (based on reported data)
a.	Global imports	33,488	4,315
b.	Affiliated imports	23,940	2,800
c.	Unaffiliated imports	9,548	1,515
d.	Ratio [b/c]	2.51	1.85
e.	Unaffiliated imports from India	288	201
Implied estimates (derived from global ratios)
f.	Affiliated imports from India [d*e]	722	371
g.	Total imports from India [e+f]	1,010	572

Source: BEA. 


Data from India on BPT exports to the U.S. were adjusted to remove the definitional differences with BEA data and international standards as described above. BEA based the adjustments on information provided in the GAO study. Not all differences were quantified in the study, so some differences remain (table 2). 


Table 2: Adjustments to India’s BPT services data, 2002 
[Millions of dollars] 
 

		High estimate	Low estimate
I.	Exports of BPT services (published by India; chart 1, left panel)	6,464	6,464
II.	Adjustments for definitional differences (derived from GAO report):
	a. Indian workers in the U.S.	40%	50%
	b. Sales through affiliated companies	20%	30%
	c. Sales of goods	10%	15%
III.	Total [a+b+c]	70%	95%
IV.	Adjusted Indian estimate of exports of BPT services [I*(1-III)] (chart 1, center panel)	1,939	323

Source: GAO; calculations by BEA. 


The ranges for adjustment factors (a) and (c) were provided by Indian officials and published in the GAO study. The effect of factor (b) was estimated by BEA at 20-30 percent, because the GAO study said that Indian officials thought the effect of this factor was “significant” but that the effect of factor (c) was “insignificant” at 10-15 percent. 

The September 2005 RBI study on Indian sales of computer services provided data that corrected for some definitional differences but the estimates still were not directly comparable to U.S. estimates because the Indian estimates were presented based on trade negotiation categories (i.e., GATS rules) that included sales by Indian-owned companies in the United States to U.S. residents, sales by Indian workers in the United States, etc. BEA used data from the RBI study to calculate a ratio of Indian exports of computer services using balance of payments definitions to total (broadly defined) deliveries of Indian computer services using GATS rules at the global level; this ratio was 39%. In addition, the study provided data on the delivery of Indian computer services (broadly defined) to North America. BEA used the global ratio to estimate balance-of-payments basis exports of computer services to North America. BEA then estimated the portion of exports to North America attributable to the U.S. using information from an Indian software trade association (table 3). 


Table 3: Adjustments to RBI’s Computer Services Data, 2002 
[Millions of dollars] 
 

		India's exports of computer services
a.	Global delivery of services - broad definition	31,133
b.	Global exports - balance-of-payments basis	12,077
c.	Ratio [b/a]	0.39
d.	Delivery of services to North America - broad definition	4,046
e.	Exports to North America - balance-of-payments basis [c*d]	1,569
f.	Ratio (U.S./North America)	0.82
g.	Exports to United States [e*f] (chart 1, right panel)	1,287

Source: RBI; NASSCOM; calculations by BEA. 

- See more at: http://www.bea.gov/faq/index.cfm?faq_id=324

[Riaz Haq]

#India is pissed about the #US now charging more money for #H1B temp worker visas: https://news.vice.com/article/india-is-pissed-about-the-us-now-char... … via @vicenews

The annual gold rush in Silicon Valley to fill out applications for guest worker visas began Friday, as the federal government began distributing some of the 85,000 H1B visas it is authorized to issue this year.

But the dash to grab visas is set against the backdrop of a political debate both within the United States and abroad about the regulations surrounding H1B visas, the government designation for visas designed for highly-skilled employees in "specialty occupations."

Just weeks ago, India filed a complaint with the World Trade Organization over an increase in fees on H1B visasthat the US imposed on companies with workforces comprised of more than 50 percent foreign workers. A provision included in last year's federal spending bill tacked on a new $4,000 fee the H1B visas, which India argues is discriminatory to the country under its trade agreement with the US.

India's complaint comes as Congress has been mulling other reforms to the H1B program to address allegations that companies are using the visas to hire cheaper foreign workers to replace American workers. The Senate Judiciary Committee held hearings earlier this year in which senators, including Ted Cruz and chairman Jeff Sessions, probed experts on whether US tech firms really needed more H1B visas to fill open positions, as they claim, and what protections might be put in place to ensure that American workers are being given preference for positions over foreign workers.

Related: The Los Angeles Unified School District Has Banned Immigration Raids on Its Campuses

"The intent of the program is to fill skills gaps in the US when American workers aren't available, but the reality is that the program has become a way for firms to create a business model that's about bringing workers who are cheaper into the US and to either substitute or directly replace Americans," said Ron Hira, a political science professor at Howard University, who testified at the hearing on February 25.

Hira said that foreign workers make anywhere from 20 percent to 40 percent less than their American counterparts within the program.

Two recent lawsuits accused companies, including Disney, HCL, and Cognizant, of firing Americans in order to hire H1B workers for less money. Leo Perrera, a former Disney employee who brought one of the suits, testified at the Judiciary hearing in February that "20 years of hard work, a bachelor's degree in information technology and an IT job for Disney were all over when my team along with hundreds of others were displaced by a less-skilled foreign workforce imported into our country using the H1B visa program."

The debate over whether the H1B program is hurting American workers rose to public consciousness amid the Republican primary debates earlier this year. Donald Trump said in one debate he supported expanding the H1B visas in one instance, but later said the system was "rampant with abuse." Ted Cruz has introduced a bill in the Senate that proposes some reforms to the programs, including minimum salary requirements for foreign workers, while Bernie Sanders has called for changes to the program. Hillary Clinton has, in the past, called for an expansion of the H1B program.

Cruz's bill is one of three bills proposing reforms to the H1B program currently in Congress. A bill proposed by Senator Chuck Grassley and Senator Dick Durbin would put in place a requirement that companies first seek American workers to fill open roles before applying to have them filled with foreign workers and would limit how many H1B workers a company could hire, while a proposal by Sessions and Senator Bill Nelson seeks to cut the number of H1B visas allocated each year.

[Riaz Haq]

#TRUMP'S #H1B VISA PLAN COULD SEE THOUSANDS OF #INDIAN WORKERS DEPORTED. #India

http://www.newsweek.com/h-1b-visa-proposal-could-see-thousands-indi...

As President Donald Trump considers plans to create new rules that would curb H-1B visa extensions and could see thousands of mostly Indian skilled workers deported while they wait for their green cards, industry leaders in India are warning that the move could also hurt the U.S. economy. 

The proposal, which was part of Trump's Buy American, Hire American initiative that he vowed to launch on the campaign trail, is being drafted by Department of Homeland Security leaders, sources have told McClatchy DC. If approved, it could see as many as 500,000 to 750,000 Indian H-1B visa holders forced to leave the U.S., IndiaToday.in has reported. 

Those who have their green card approved would be able to return to the U.S., but it would essentially mean restarting the process of establishing a life in America.

Industry leaders in India have also warned that the new rules could cause a shortage of skilled workers in the U.S., potentially damaging the country's economy. 

[Riaz Haq]

Green card share for skilled #Indian #immigrants (EB-2, EB-5 visas) drops to 10% from 14% as application share rises in 2019. Virtually all applicants for EB-2 and EB-3 green cards are on H-1B visa in #UnitedStates. #Trump #Modi #H1B #India https://bayareane.ws/2w2E01a via @mercnews

While a fierce debate rages over a U.S. Senate bill to scrap per-country green card limits — with opponents claiming it would give unfair advantage to Indian citizens — the share of green cards going to skilled Indian workers has dropped, according to a new report.

Meanwhile, the share of green card applications filed by employers for Indians has risen, according to the report released this week by the Cato Institute.

Skilled Indian workers received 10 percent of available green cards in the two largest green card categories — the EB-2 and EB-3 visas for skilled workers — in 2019, down from 14 percent the year before, the report said. Meanwhile, the share of applications filed for Indian citizens by employers jumped to 53 percent from 50 percent, according to the report.

Virtually all applicants for EB-2 and EB-3 green cards are on the H-1B visa or other temporary work visas, said report author David Bier, a Cato immigration-policy analyst. Hundreds of thousands of foreign citizens, the vast majority from India, are stuck in a green card backlog with wait times reaching decades, Cato has reported.

The disparity between the proportion of green cards allotted to Indians and the share of green card applications made for Indians has persisted for years, but broadened significantly from 2018 to 2019, the report said.

“Nearly all (93 percent) of the immigrants waiting for green cards solely because of the low immigration limits are from India,” the report said.

Under federal law, no single nationality can receive more than 7 percent of the total green cards issued per year, though undistributed green cards can be added to that percentage on a first-come, first-served basis.

A bill to address green card waits, The Fairness for High-Skilled Immigrants Act, passed the U.S. House of Representatives last fall, but has been tied up in the U.S. Senate amid a bitter dispute over whether it is fair to citizens of other countries and U.S. workers to start giving Indian citizens a lion’s share of green cards.

The bill calls for a maximum 85 percent of green cards to be allocated to Indian or Chinese citizens during the first year of implementation. In the second and third years, that would rise to 90 percent.

Bier, in the report, expressed support for the bill, saying the current law creates an “exceptionally unjust system.” Declines in Indians’ share of green cards “will have devastating consequences for recent Indian applicants, effectively guaranteeing that they will not receive green cards at all,” Bier wrote. “Many Indians would die waiting for green cards if they could stick it out, so most will leave the line before then.”

But Center for Immigration Studies lawyer John Miano said the bill “would create a total train wreck in the immigration system.”

Miano pointed to the controversial H-1B visa — intended for jobs requiring specialized skills, used heavily by tech firms and outsourcing companies, and dominated by Indian citizens — as a significant driver of the green card backlog.

[Riaz Haq]

Supply Of Services Outside India By "Intermediaries" Not Export, And Hence, Subject To IGST: Gujarat HC [Read Judgment]

https://www.livelaw.in/news-updates/supply-of-services-outside-indi...

"Only because, the invoices are raised on the person outside India with regard to the commission and foreign exchange is received in India, it would not qualify to be export of services, more particularly when the legislature has thought it fit to consider the place of supply of services as place of person who provides such service in India", stated the bench.

https://www.livelaw.in/news-updates/supply-of-services-outside-indi...


The Gujarat High Court has ruled that supply of services outside India by "intermediaries" in India is not an export, thereby continuing their liability.