Falling behind the Curve: Effects of an Outdated U.S. Immigration Policy

By Camille Danvers

U.S. tech companies, like Adobe, are constrained in their ability to hire high skilled labor from India due to current immigration policy. Source: everyplace's flickr photostream, used under a creative commons license.

David Cameron recently visited India for three days with the largest delegation a British Prime Minister has ever led to India. With him, Cameron brought an important message: the United Kingdom welcomes Indian students and high-skilled workers and is making it easier for them to acquire visas to study and work in the UK.

Competition to attract Indian high-skilled immigrants extends beyond the United Kingdom. Canada and Chile offer “start-up” visa programs and Australia uses a skilled-matching system, allowing high-skilled workers easier entry into their country and the government to target workers from fields in which they are deficient.

Cameron’s trip and these initiatives should send a clear signal to U.S. lawmakers. If the United States does not change its visa laws soon to allow more Indian and other students and professionals, it will begin to lose out on the benefits of retaining these high-skilled immigrants. This issue should not be used as a bargaining chip for further negotiations; the U.S. economy will suffer if Congress does not address high-skilled immigration reform.

The evidence that Indian immigrants and Indian businesses boost the U.S. economy is clear. Since 2006, Indian nationals have founded 33.2% of all engineering and technology companies founded by immigrants in the U.S., which accounts for about 1/4 of all companies launched. More than 250,000 jobs for locals in the U.S. are supported by Indian companies, even since the 2008 recession this number has grown steadily.  Indian investments have also been crucial to U.S. businesses, according to the White House, Indian companies have invested more than $4.9 billion and employ more than 27,000 Americans.

Despite the ample evidence and Congressional testimony attesting to the benefits of retaining immigrants, especially in science, technology, engineering, and mathematics (STEM) fields, current U.S. policy is based less on U.S. interests, than on arbitrary numbers.  The system right now grants individual nations no more than 7% of all of our green cards whether the nation is India or Iceland.  Specifically, there are only 10,000 green cards available for between 350,000 and 400,000 Indian immigrants.

The 65,000 cap for H1B visas (although this number can fluctuate a bit) does not account for demand, neither in number, nor skill set.  As Ameet Nivsarkar, vice president of the National Association of Software and Services Companies (NASSCOM), an Indian-based IT industry group, pointed out, in 2011, 40% of visas were rejected, a 500% increase from the previous year.

Outdated immigration policies have been an issue of growing consternation for U.S. and Indian businesses. Since 2006, scholar Vivek Wadhwa has been arguing that U.S. immigration policies block the best and the brightest foreign workers saying, “Their first choice is to be here. They came here, they’re working here, they want to stay here, but we won’t give them visas.”

NASSCOM President, Mr. Som Mittal told Business Line at a two-day NASSCOM Summit in August 2012, “We think it is a trade barrier that is being created. The Government also made this very clear. It is a matter of concern because it creates uncertainty for our companies.” The current immigration system has created a reverse brain drain. If creative Indian minds cannot work in the United States they will set up shop elsewhere.

The United States should act now.

Ms. Camille Danvers is a research intern with the Wadhwani Chair in U.S.-India Policy Studies at CSIS.

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