The Facts on Value Creation by Indias IT Sector in America

Creating Jobs and Value in America

By helping thousands of U.S. businesses improve their operations, create new products and services, and gain
market share, India-centric IT companies are protecting and creating thousands of jobs for Americans.

Indias IT sector directly employs more than 100,000 workers in America and indirectly supports jobs for
hundreds of thousands more. A few of our members specific investments in the U.S. workforce include:
Tata Consultancy Services announced a $35 million grant to Carnegie Mellon University to open a new
tech training facility on the CMU campus the largest ever industry donation to CMU.1
Infosys announced a pledge to hire 10,000 more American workers and to open new training centers in
Indiana and North Carolina.2
During FY16-17, Wipro hired more than 3,000 Americans and added two multi-client delivery centers in
California and Michigan, staffed predominantly by local talent.3

More broadly, NASSCOM members provide operational support for more than three-quarters of Fortune 500
companies and thousands of other American businesses, which helps protect and create millions of American
jobs in U.S. companies that are stronger and more competitive.

Technological advances such as social, mobile, analytics, and cloud are among the most important drivers of
growth in todays economy, and NASSCOM members are among the worlds leaders in helping their customers
develop and manage these disruptive digital transformations.

Indias IT sector has invested billions of dollars in the U.S. in other ways:
Generated payments of more than $20 billion in U.S. federal, state, and local taxes from 2011 to 2015.
Paid $375 million to the U.S. Treasury in additional visa application fees funds that supported other U.S.
federal priorities, including border security on top of the hundreds of millions of dollars that visa
petitioners pay in base fees and into a Department of Labor block grant program for training of U.S. workers.
Made philanthropic contributions that touch tens of thousands of American lives annually, including
STEM education programs, training for U.S. military veterans, fellowships for teachers, and contributions
to disaster relief, food banks, health organizations, and other charities.

Filling U.S. Skills Gaps

Every reputable data source from the U.S. Department of Labor and National Science Foundation to the
Brookings Institution has documented a growing shortfall between the supply and demand for computer
science majors in the U.S. workforce, especially in cutting-edge fields such as cloud, big data, and mobile
computing.

The U.S. Department of Labor estimates there will be ~2.4 million unfilled STEM jobs by 2018, with >50%
of these vacancies in IT-related positions. Unemployment in U.S. tech sectors is about half of the national
average. In 2016, the aggregate unemployment rate was 4.9%, while that for tech occupations it was 2.5%.4

For decades, U.S. policy has addressed the shortage of skilled IT workers by:
Encouraging STEM education, training, and retraining for Americans; and
Allowing U.S. companies to sponsor highly-skilled IT and other high-skilled professionals to temporarily
work in the United States on H-1B, L-1 and other visas.

1
https://www.cmu.edu/news/stories/archives/2017/april/tcs-hall-groundbreaking.html
2 https://www.infosys.com/newsroom/press-releases/Pages/technology-innovation-hubs-usa.aspx
3
http://www.wipro.com/newsroom/press-releases/Locals-now-form-over-50-percent-of-Wipros-workforce-in-the-US/
4 Source: U.S. Bureau of Labor Statistics; NASSCOM Analyses

Updated September 2017

NASSCOM applauds U.S. initiatives to expand workforce training and apprenticeship programs, which will
help close the U.S. skills gap. Our members invest heavily in upskilling workers at sites across the United
States and in helping ensure that the next generation of US workers has the skills necessary to succeed,

However, without access to high-skilled IT workers on temporary visas, many U.S. companies would lack the
talent they need and would be forced to choose between shifting more IT work offshore, where larger talent
pools are available; or delaying innovation because of the lack of local talent in the U.S.

Bloomberg Intelligence analyst Anurag Rana concurs that the H-1B visa program keeps jobs in the U.S. that
might otherwise be shipped offshore.5

Leaders of various American technology firms have indicated their reservations with the H-1B visa curbs
Eric Schmidt, executive chairman of Googles parent company, Alphabet, said, "The single stupidest policy
in the entire American political system was the limit on H-1B visas," at an event at MIT's Computer Science
and Artificial Intelligence Lab.6
Facebook CEO Mark Zuckerberg wrote, We are a nation of immigrants, and we all benefit when the best
and brightest from around the world can live, work and contribute here.7 Earlier, in 2013, he wrote,
"Immigrants are the key to a knowledge economy. Why do we offer so few H-1B visas for talented
specialists that the supply runs out within days of becoming available each year, even though we know each
of these jobs will create two or three more American jobs in return?8

U.S. government data show that the high-skill visa programs are not a major cause of U.S. unemployment.
According to the U.S. Bureau of Labor Statistics, across the U.S. economy, approximately 20 million people
per year lose their jobs due to reasons not linked to hiring H-1B employees.
Compared to that, the annual number of H-1Bs granted to the top 10 India-centric IT service companies
in 2016 was only a tiny fraction of the U.S. workforce (about 60,000 compared to 158 million persons).9
The seven India-based companies that had the most H-1B visas approved for new employment in FY 2016
collectively accounted for only 11 percent of the total approved new visas issued that year.10
Moreover, according to an analysis of U.S. Citizenship and Immigration Services (USCIS) data by the
National Foundation for American Policy, the number of new H-1B petitions by the top 7 India-centric IT
firms dropped by 37 percent between FY 2015 and FY 2016.11 The changing workforce composition is
in response to industry trends and the changing nature of work in particular, digital services such as
cloud computing and artificial intelligence. This is reflected in a significant decline in the number of H-1B
visas that are being used by Indian IT companies and an increase in the hire of local U.S. workers.

Contrary to the popular myth, Indian IT specialists working on temporary visas are not cheap labor.
According to a study by the Pew Research Center, based on fiscal 2016 data from U.S. Citizenship and
Immigration Services (USCIS) data, for eight of the top 10 India-centric IT companies, the average salary for
workers on H-1B visas was higher than the median salary for U.S. citizens in computer and mathematical jobs.12

Taking the broadest view possible, a recent comprehensive study by the Center for Global Development found
that the H-1B visa program provides benefits to both the U.S. and India, and it is a contributing factor to the
expanding high-tech sectors in both countries.13

5
https://www.youtube.com/watch?v=2kb2IvGMQec
6 http://thehill.com/policy/technology/332011-alphabets-eric-schmidt-h1-b-visa-cap-is-stupid
7 https://www.facebook.com/zuck/posts/10103460278231481
8 https://www.washingtonpost.com/opinions/mark-zuckerberg-immigrants-are-the-key-to-a-knowledge-

economy/2013/04/10/aba05554-a20b-11e2-82bc-511538ae90a4_story.html?hpid=z2&utm_term=.d6ef803c14b5
9
http://www.pewresearch.org/fact-tank/2017/08/16/salaries-have-risen-for-high-skilled-foreign-workers-in-u-s-on-h-1b-visas/
10 The top seven companies were Infosys, Tata Consultancy Services, Wipro, HCL America, Tech Mahindra Americas, L&T Infotech,

and Mindtree.
11
http://nfap.com/wp-content/uploads/2017/06/DAY-OF-RELEASE.H-1B-Visas.1.June-2017.pdf
12
http://www.pewresearch.org/fact-tank/2017/08/16/salaries-have-risen-for-high-skilled-foreign-workers-in-u-s-on-h-1b-visas/
13
https://www.cgdev.org/blog/technology-innovation-and-american-dream-new-study-finds-h-1b-visas-benefit-us-and-indian

Updated September 2017

The U.S. and India Are Strategic Partners

Under both Republican and Democratic presidents, India has been growing in importance as a strategic
partner of the United States.

India is the worlds fastest-growing major economy, the largest democracy, the second-largest English-speaking
population, the second-most populous nation after China, and a rapidly growing market for U.S. goods and
services.

A key aspect of the U.S.-India relationship is bilateral trade, which grew by more than 250% over the last
decade, from $45.1 billion in 2006 to $114.8 billion in 2016.14

According to a PwC report, India is opening its economy to global companies with reforms such as raising
foreign direct investment (FDI) limits, dropping licenses and regulatory barriers, and inviting high-tech
solutions. American business investment in India jumped 50% in the first six months of Prime Minister Modis
new government, which is focused on growing the domestic digital economy.

Employers Needing H-1Bs Already Face High Barriers

IT service providers employing workers on H-1B visas already face significant legal and processing fees,
training grant fees, regulatory restrictions, and paperwork burdens imposed by the U.S. government. On top
of the requirement to pay H-1B workers at least the actual market or prevailing wage for their job
description, employers can pay as much as an additional $10,000 per worker to obtain a visa and bring the
worker to the U.S.

Moreover, the U.S. government is applying much harsher adjudicatory standards to high-skill visa petitions
coming from India relative to other nations. Similarly, the U.S. government imposes additional fees of $4,000
or more on the visa petitions submitted by many Indian companies as opposed to other firms.

This is despite the fact that the business model of India-based IT service providers is no different than that of
companies based in the U.S., Europe, and elsewhere.

No Evidence of Widespread Abuse

The H-1B program is a highly regulated and scrutinized program in the U.S. economy, and NASSCOM member
companies abide by all applicable laws and regulations.
We support efforts to root out any fraud or abuse in the H-1B system.
NASSCOM member companies are rarely, if ever, the subject of enforcement actions by USCIS for abusive
practices, and they are industry leaders in terms of full compliance with existing rules and regulations.

Looking Optimistically to the Future

NASSCOM and the leaders of Indias IT industry look forward to working with the Trump Administration and
the 115th Congress to continue the sectors access to the U.S. market and its contributions to the U.S. economy.

Points of Contact (Washington, DC): Point of contact (New Delhi):

Dale Curtis or Ram Uppuluri for NASSCOM Shivendra Singh, NASSCOM Vice President
dale@dalecurtiscommunications.com of Global Trade Development
ram@dalecurtiscommunications.com shivendra@nasscom.in
+1-202-495-3700 (office) +91-98-1007-9389

14
Source: US Trade Rep https://ustr.gov/countries-regions/south-central-asia/india

Updated September 2017