Tag Archives: U.S.-India relations

Immigration Blog

Are Indians Using All the H-1B Visas?

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If one follows the press, one would assume Indian companies or Indian nationals use all the H-1B visas. Yet the issue is much more complicated than that. In fact, a focus on about a handful of top-using companies has distorted the overall picture of these visas used for highly skilled foreign nationals across the U.S. economy.

To understand the issue, it’s necessary to divide the use of H-1B visas into two separate categories: 1) H-1Bs petitioned for by India-based companies and 2) H-1Bs received by Indian foreign nationals. While there is an overlap between the two groups, these are not the same thing.

H-1B Visas Used by Indian Companies

A January 2011 headline from the technology blog of the Capitol Hill newspaper The Hill read: “GAO: Disproportionate share of H-1B Visas going to India-based staffing firms.” The article noted, “Almost half of all H-1B visa holders are from India.” The perception that Indian companies use most of the H-1Bs is often utilized by critics to undermine support for H-1B visas more generally.

One of the ironies of the criticism of Indian companies and H-1B visas is that the use of H-1Bs by such companies has declined quite a bit in recent years. As a March 2010 report from the National Foundation for American Policy (NFAP), where I am executive director, explained, “USCIS data show in FY 2009, less than 6 percent of new H-1B petitions went to Indian technology companies. Indentifying 25 India-based firms one finds Indian companies utilized fewer than 5,000 (4,809) new H-1B visas in FY 2009. Moreover, tracking these same companies over time, shows that the number of new H-1B visas utilized by Indian technology firms fell by 70 percent between FY 2006 and FY 2009.” (See Figure 1 below.) Based on the release of a list of the top 10 companies for new H-1Bs in FY 2010, it appears the Indian company use of H-1Bs was greater in 2010 than in 2009.

The NFAP report also explained that it is simplistic to assume that visas utilized by an Indian technology company (or any other company) means a loss of jobs in the United States: “When Indian technology companies or other non-Indian IT service providers perform work in the United States it is because U.S. companies believe such work makes their businesses more profitable . . . To the extent Indian (and non-Indian) companies performing information technology service work allow U.S. businesses to focus on core functions, run more efficiently, and enhance shareholder wealth, U.S. companies can hire more people in the long run by becoming more profitable.” This is not the popular perception but just because a viewpoint isn’t popular doesn’t mean it’s not true.

Moreover, when an individual enters the U.S. workforce, he or she earns a salary and spends that money. That spending helps support other jobs in the economy. In addition, when new workers help increase productivity they also help enhance the standard of living in an economy.

                                     Figure 1

H-1B Visas for Indians

A separate issue involves H-1B visas received by Indian nationals. The data from U.S. Citizenship and Immigration Services (USCIS) show Indians are a key source of H-1Bs. This reflects the size of the Indian population, the education level of Indian workers and students, and interest in working in the United States. Many of these individuals have graduated from U.S. universities and are hired off U.S. campuses.

(Source: U.S. Citizenship and Immigration Services, National Foundation for American Policy)

In most years, Indians have not been a majority of the new hires on H-1Bs. (See Table 1.) Examining data from USCIS for “initial employment” one can see Indians represented about 45 percent of H-1Bs in 2000 and 2001, dropped to under 30 percent with the economic downturn in 2002 and 2003, then rose to over 50 percent from 2006 to 2008. In 2009, the Indian percentage dropped to 39 percent. (“Initial employment is the term to denote an H-1B used by a new H-1B visa holder, rather than someone renewing status or switching to a new employer.)

Table 1

H-1B Petitions for Indian Nationals Approved for Initial Employment: FY 2000-2009

Year Percentage used by Indians Number used by Indians
2000 44.5 percent 60,757
2001 45.2 percent 90,668
2002 20.4 percent 21,066
2003 27.8 percent 29,269
2004 46.0 percent 60,062
2005 49.0 percent 57,349
2006 54.4 percent 59,612
2007 55.4 percent 66,504
2008 56.5 percent 61,739
2009 39.4 percent 33,961
43.9 percent (average) 54,098 (average)

                                                                (Source: U.S. Citizenship and Immigration Services)


Table 2 provides a look at Indian nationals compared to those from other countries in being hired on new H-1B visas. Table 2 shows in FY 2009, Indians utilized 39.4 percent of the petitions approved for “initial employment,” while the next largest recipients were individuals from China (10.4 percent), Canada (5.3 percent), Philippines (4.3 percent), South Korea (2.5 percent) and United Kingdom (2.3 percent).

Table 2

H-1B Petitions Approved for Initial Employment by Country of Birth in FY 2009


Country of Birth Percentage of H-1Bs Approved for Initial Employment
India
 39.4 percent
China 10.4 percent
Canada 5.3 percent
Philippines 4.3 percent
South Korea 2.5 percent
United Kingdom 2.3 percent
Japan 2.0 percent
Mexico 1.9 percent

 (Source: U.S. Citizenship and Immigration Services)


Conclusion

Although the annual H-1B cap is 65,000, there is also an additional 20,000 slots permitted for individuals who receive a masters degree or higher from a U.S. university. H-1B visa holders hired by U.S. universities or non-profit research institutes are exempt from the numerical limits. Overall, we normally see a little more than 100,000 H-1Bs approved in a year for “initial employment.” That annual flow of new H-1B visa holders comes to about 0.06 percent of the U.S. labor force. It should be obvious that while such professionals are important to many employers and the United States as a whole, given this small percentage it is difficult to argue they are creating widespread joblessness or other “evils” that are sometimes attributed to them.

Immigration Blog

Indian Students to the U.S. Have Nearly Doubled in 10 Years

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A surprising development in recent years is the dramatic growth in Indians coming to the United States to study. In a phenomenon that has largely gone unreported, the number of Indians studying at American colleges and universities has nearly doubled since the year 2000.

Figure 1 below shows the almost steady rise in Indian enrollment in the United States, based on figures compiled by the Institute of International Education. One can see that in the 2000/2001 academic year the number of Indian students enrolled was below 60,000, while by 2009/2010, the total exceeded 100,000.

figure1

To gain a better perspective on the numbers, one can see below in Table 1 the large percentage increase in the enrollment of Indian students in the U.S. since 2000. Between the 2000/2001 and 2009/2010 academic years the number of Indian students enrolled at American colleges and universities increased by 92 percent. That is an extraordinary figure by any measurement.

Table 1
Indian Students Enrolled at U.S. Colleges and Universities

Academic Year Number of Indian Students Enrolled
2000/2001 54,664
2001/2002 66,836
2002/2003 74,603
2003/2004 79,736
2004/2005 80,466
2005/2006 76,503
2006/2007 83,833
2007/2008 94,563
2008/2009 103,620
2009/2010 104,897

Yet the percentage increase in the enrollment of Indian students in the U.S. is even larger if one goes back to 1995. In the 1995-1996 academic year, only 31,743 Indians were enrolled to study in America. That means Indian enrollment at U.S. colleges and universities rose by over 200 percent between 1995 and 2009.

 

figure2

Increases in Graduate or Undergraduate Students From India?

Students pursuing graduate degrees are a primary source of the increase in Indian enrollment in the last decade. In the 2000/2001 academic year, 12,259 Indian undergraduates studied in the U.S. compared to 15,192 in 2009/2010. However, in 2000/2001, the number of Indian graduate students totaled 39,797, but rose to 68,290 by 2009-2010.

Yet those number do not tell the whole story. As Table 2 shows below, Optional Practical Training (OPT) makes up over 18 percent of Indian enrollment in the United States. OPT permits temporary employment for training that is “directly related to the student’s major area of study,” according to Immigration Customs and Enforcement.

Table 2

Indian Students in U.S. by Academic Level: 2009/2010

Academic Level Number Percentage of Total
Undergraduate 15,192 14.5 percent
Graduate 68,290 65.1 percent
Non-Degree 1,758 1.7 percent
OPT 19,657 18.7 percent
TOTAL 104,897

The Implications of These Numbers

The rise in Indian students coming to America reflects positive trends in both countries. First, since most students generally must pay a substantial portion of their education out of family or individual assets, the rise in U.S. enrollment reflects increased wealth in India. Second, the enrollment increase also indicates the rise in technology companies in both India and the United States and the importance of education in technical fields. Third, this is a good news story for American universities, showing their ability to attract outstanding students from all over the world.

A final, important implication of these numbers is that international education makes the globe smaller and a better place to live. Indians who stay in the United States after graduation have the opportunity to build a career that may involve interaction with people or companies in India. Students who complete their studies in America and return to India have acquired greater knowledge of an important market for both customers and commercial partners. And American students gain the opportunity of getting to know individuals and cultures from halfway around the world without even having to leave a college campus.

(Figures and Tables Source: Institute of International Education)

India-US Relations Blog

Fighter Shoot-Down

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India’s elimination of Boeing’s and Lockheed Martin’s bids in its $11 billion fighter aircraft competition – one of the country’s largest-ever defense deals – is bound to have negative repercussions for the U.S.-India relationship. Analysts had expected at least one of these bids to advance to the final selection round; that neither did is being perceived as a deliberate snub of Washington. John Elliott, a long-time observer in New Delhi, interprets the move as an effort aimed at “keeping the U.S. firmly in its place.”

http://www.usinpac.com//images/stories/F-16IN_AT_AeroIndia2011.jpgThe Indian decision will add to Washington’s growing list of bilateral frustrations and is yet another sign that ties between the two nations continue to fall far short of the promise that glistened just three short years ago when the landmark nuclear cooperation accord was concluded.  That news of India’s action coincided with the (unrelated) announcement of Timothy J. Roemer’s resignation as U.S. ambassador in New Delhi only heightened the sense of disillusionment and fatigue.

The decision makes some sense on the basis of technical merits. The F-16 aircraft proffered by Lockheed Martin is a widely-used workhorse but also a 30 year-old platform; that Pakistan is one of the 26 air forces flying the plane also could not have endeared the Indian defense ministry. Boeing’s F/A-18 is a much newer system but it reportedly did not perform well in flight tests over the Himalayan ridges in Ladakh.  Eurofighter’s Typhoon aircraft – which New Delhi has shortlisted for possible selection – has much to recommend it technically. Additionally, the four-nation Eurofighter consortium (composed of British, German, Italian and Spanish defense companies) – along with France’s Dassault Aviation SA (whose Rafale fighter also was advanced to the final round) – also was more generous than the U.S. companies in terms of technology transfer.

American companies (including Boeing and Lockheed Martin) have snapped up a number of recent contracts from the Indian military, and one can expect New Delhi to award additional deals in the coming months as palliatives for U.S. disappointment at losing out of this highly lucrative transaction.

Some Indian commentators are of the view that, with bilateral ties now so multi-dimensional and mature, Washington’s sense of letdown will be fleeting. But this is likely to prove wishful thinking.  The Indian decision will certainly not derail bilateral affairs. But given the Obama administration’s aggressive lobbying on behalf of the American bids, it will only deepen the perception in Washington that New Delhi has not lived up to its side of the bargain by reciprocating the huge commitment the United States has made over the past decade to bolster India’s great power prospects.

As Siddharth Vadarajan, the strategic affairs editor of The Hindu, notes, Washington came at the fighter deal with “all guns blazing.” The U.S. campaign included President Obama, who made a personal intervention with Prime Minister Manmohan Singh during his state visit to India last November and then followed up in February with a letter underscoring “the strategic importance the United States attaches to the selection of a U.S. proposal in India’s Medium Multi Role Combat Aircraft competition.”  Ambassador Roemer was tireless in pressing the same message.  And to sweeten the pot, the United States granted India the opportunity to participate in Lockheed Martin’s program to develop the advanced technology F-35 fighter aircraft – an offer that New Delhi effectively rebuffed last December when it opted for a joint arrangement with Russia to develop a separate fifth-generation fighter aircraft.

As an earlier post argued, Washington is becoming increasingly weary of New Delhi’s capacity for strategic engagement. The political soap opera accompanying the Indian parliament’s debate about the nuclear cooperation agreement in the summer of 2008 was disheartening from the U.S. perspective and could hardly inspire confidence that India was ready to move ahead with full-throttle cooperation. Adding to the list of sorrows is that the nuclear liability law adopted by India last year has the effect of all but blocking the involvement of U.S. companies in India’s nuclear energy sector – one of the things that the nuclear deal was supposed to bring about. (And following Japan’s nuclear disaster, U.S. hopes that New Delhi would revisit the law anytime soon are stillborn.) And despite numerous suggestions for bi-national endeavors at producing clean energy technology, Washington is miffed that Indian restrictions on imports of solar-power technology are thwarting the entry of U.S. firms into one of the world’s fastest-growing solar-energy markets.

Boeing's F/A-18 at the Aero India 2011 air showTroubling as well are reports that a major factor in India’s elimination of the Boeing and Lockheed Martin bids was the military’s continued wariness of the United States as a full-fledged strategic partner. In contrast to institutional memories of past U.S. technology embargoes that still linger throughout the security establishment, the military supply relationship New Delhi has forged with Paris – Dassault’s Mirage 2000 fighter has long been in service with the Indian air force – seemed to play an important role in the decision to shortlist the Rafale. The Obama administration had worked hard to ease these memories, including advancing the F-35 offer and the further easing of U.S. export controls on India that were announced in February.  Mr. Obama’s letter to Prime Minister Singh also made promises on this score.

While India’s decision will certainly not produce a bilateral rupture, its consequences may be more pronounced than the rosy scenario sketched by the optimists. At a moment when the Obama administration has begun to turn its attention back to New Delhi, it will reinforce nagging doubts in Washington about India’s willingness to make the big decisions necessary to dramatically advance the relationship.  Such doubts could even break into the open given the bilateral frictions likely to ensue as the United States approached the endgame in the Afghan conflict. There may be solid technical reasons behind the fighter decision. But the soundness of its strategic logic is about to be put to the test.

India-US Relations Blog

How to lose friends and alienate people

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India’s decision to reject U.S. fighter planes is strategic stupidity.

New Delhi, it is reported, has shortlisted two European vendors for its long-drawn procurement of fighter aircraft for the Indian Air Force. Now, military analysts can have endless debates and even objective opinions on which among the American, European and Russian aircraft is technically superior and better suits the stated requirements of the IAF. Financial analysts can have similar debates and objective opinions on which is the cheapest or the best value for money. These opinions may or may not converge. But when you are buying 126 planes worth more than $11 billion dollars, you are essentially making a geostrategic decision, not a narrow technical/financial one.

The UPA government’s decision to reject both American proposals, of the F-16 and F/A-18, demonstrates either a poor appreciation of the geostrategic aspect or worse, indicative of a lingering anti-American mindset. While the U.S. ambassador has resigned, whether or not it will prove to be a setback for India-US relations remains to be seen. Damaging the careers of pro-India American officials is a silly thing to do.

This move will most certainly reduce India’s geopolitical leverage with the U.S. military-industrial complex, at a time when India needs it most. From the unfolding dynamics in the Afghanistan-Pakistan region, to the changing balance of power in East Asia, to UN Security Council reform, to a number of geoeconomic issues, the United States can take positions that can have long-lasting consequences for India’s interests. Is the United States more likely to be sympathetic to India’s interests after a $11 billion contract—which means much needed jobs for the U.S. economy —is awarded to someone else? Long used to complaining that the United States doesn’t care for India’s interests, will awarding the contract to some European firms help change the situation?

The argument that the European bids were ‘technically’ superior are not entirely credible either, for two reasons. First, at sufficiently high levels of technology, the difference between the planes on offer is marginal. To suggest that the European models are vastly superior defies logic, because some of the world’s most powerful air forces are flying F-16s, leave along F/A-18s. Second, the notion that combat requirements can be perfectly defined at the time of procurement is false. It is the combination of man and machine that wins battles. The focus on machines ignores the reality that much swings on the man flying it. Moreover, given the nuclear deterrence relationships obtaining in the subcontinent and across the Himalayas, those planes might never see an aircraft-to-aircraft dogfight in their lifetimes. For other tasks like air support for ground operations, the specifications are even lower.

What about those alphabet soup agreements and fine-print contracts that the U.S. insists that India sign, that might prevent the planes from being used when needed? Those who make these arguments do not understand what war means. War means all bets are off, and India will do whatever necessary to protect its interests. While the existence of those agreements was a usual bargaining chip for India, to get a discount, to believe that such arguments will hamstring India’s military options is naivete. The government might not need to spell this out in public, but it should know it.

It has been this blog’s argument that in the contemporary geopolitical environment, India’s interests are best served by being a swing power, holding the balance between the United States and China. It must enjoy better relations with each of them than they have with each other. It must also have the credible capacity to give pleasure and inflict pain. In this context, buying fighter planes from the United States would have been an excellent move.

And who has New Delhi shortlisted instead? European companies. The European Union is a bit player in the international system, zealously safeguarding its own legacy position at the United Nations Security Council, the G-20, the World Bank, IMF and other places, against India. Italy is engaged in process of blocking India’s UNSC candidature. An order placed with Eurofighter or Rafael isn’t going to change its plans. EU busybodies can be found everywhere from inviting Kashmiri separatists to speak, to attending court hearings of Binayak Sen. Some small EU states almost wrecked the India-specific waiver that the United States was obtaining at the Nuclear Supplier’s Group. When it’s crunch time in Afghanistan, does anyone in New Delhi think that the EU will or can make any move that’ll safeguard India’s interests? Why is India being gratuitously generous to Europe when there is much to gain from giving the contract to the United States?

Yes, France, Britain and Germany are countries that India must engage. There are ways to allow them to benefit from India’s growth process—from power projects to manufacturing to services. The fighter aircraft contract need not be awarded to European firms, because it has higher strategic opportunity costs.

The downshot is that the UPA government has squandered a unique opportunity to gain leverage in Washington at a crucial time when closer ties are in India’s interests. It first took way too long to decide, dragging the procurement process even China built its own new fighter plane. It now decided to pick two vendors who might well sell a technically superior and cheaper product, but do no more than that. To put it mildly, this is strategic stupidity.

(This post originially appeared on this author’s blog at acorn.nationalinterest.in)

India-US Relations Blog

The Ties that Bind

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Three years after the conclusion of the path-breaking civilian nuclear agreement, the U.S.-India relationship suffers from the lack of a new energizing project. In its first year or so, the Obama administration did not display much interest in continuing its predecessor’s high-profile engagement with New Delhi, turning its attention instead to expanding ties with Beijing. To be sure, the United States more recently has moved to re-engage India, as evidenced by the warm sentiment flowing from President Obama’s state visit last November. The problem is that Mr. Obama’s rhetoric during the trip made it sound like the visit was more connected to his export-promotion initiative than to any grand foreign policy objective.

For its part, New Delhi is a constrained strategic partner, one that is not well-equipped – ideologically or institutionally – to take on bold bilateral projects. While Prime Minister Manmohan Singh finally did manage to push the nuclear agreement through a balky Parliament, his victory was in important measure pyrrhic, in the end revealing just how small the consensus (see the analysis here and here) is among Indian political elites for undertaking ambitious bilateral initiatives.

Credit: thesouthasian.comThe paucity of visible leadership in both capitals is problematic. It is true that both governments are collaborating as never before at the bureaucratic level. But the U.S.-India partnership has yet to find sure footing and still lacks sufficient institutionalization to advance the new era in bilateral relations. Robert Blackwill has warned that “neither the U.S. nor the Indian bureaucracies at present are yet prepared instinctively to facilitate a deeper and more intimate degree of cooperation between the two countries….It is going to take leadership and direction from the top to change old habits and attitudes.” Ronen Sen has made a similar point: “We have not reached the point where the relationship can be placed on auto-pilot. It still needs to be nurtured.”  And the Hindustan Times noted last year that the Washington-New Delhi connection is still not yet “a machine that will move on its own steam.”

The burden of advancing bilateral affairs, at least in the next few years, will have to be borne by the key societal bonds that helped build the relationship in the first place.  Headlines about the nuclear cooperation accord and expanding military ties notwithstanding, it is important to bear in mind that the foundation for the partnership was actually forged outside the realm of government policy and far beyond the confines of Washington and New Delhi. Unlike most of the relationships maintained by the United States with other leading countries, the one with India is distinguished by the signal role played by societal ties and privatesector initiatives. As Shivshankar Menon, now Prime Minister Singh’s national security advisor, remarked last year, “[I]f anything, the creativity of [American and Indian] entrepreneurs, engineers and scientists has sometimes exceeded that of our political structures.” And Nicholas Burns, who did yeoman’s work in hammering out the details of the nuclear accord, emphasizes that societal bonds are “the greatest strength in the relationship” and that “the big breakthrough in U.S.-India relations was achieved originally by the private sector.”

Consider, for example, the dynamics at work a little more than a decade ago. In response to the 1998 nuclear tests, Washington imposed an array of economic sanctions on India and expelled visiting Indian scientists from U.S. government laboratories. Yet at the same time, concerns about the “Y2K” programming problem led companies in Silicon Valley and in India to set the foundation for today’s strong technology partnership. And as I wrote earlier, the Indian-American community, relatively small but highly influential, has lead the way in building new ties between its native and adoptive countries.

credit: charlierose.comThe significant role played by these societal bonds has caused Fareed Zakaria to compare U.S.-India ties to the special relationships the United States has with Great Britain and Israel. Shashi Tharoor has likewise remarked that “in 20 years I expect the Indo-U.S. relationship to resemble the Israel-U.S. relationship, and for many of the same reasons.”

Although they are often overlooked by national policymakers, societal bonds give fuller texture and equipoise to the bilateral partnership than could be hoped to be achieved at the intergovernmental level alone.  And at a time when bureaucratic mechanisms are not firing on all cylinders, strengthening these ties will be one key in securing the growth of broad-based, resilient relations over the long term since they work to limit the risk that political and diplomatic frictions could escalate and disrupt the overall U.S.-India partnership.

This is particularly important as the structural dynamics of the bilateral relationship will prove challenging to manage in the future.  The basic framework of U.S. security and economic relations with a number of key countries in Europe and Asia was laid down in another era of world politics, when the national power of these states was in decline.  The resulting alliances were, and in many ways still remain, unequal partnerships.  In contrast, India’s power trajectory is upward.

Moreover, foreign policy elites in New Delhi continue to insist on the prerogative of strategic autonomy and, hence, are unlikely to accommodate Washington’s priorities as readily as other U.S. allies.  With continuing divergences over foreign policy objectives, frictions will inevitably develop on a range of issues – from global trade negotiations, climate change and nonproliferation policy, to differential approaches on Afghanistan and Pakistan, as well as India’s bid for a higher profile in world affairs. As Nick Burns cautions “the United States must adjust to a friendship with India that will feature a wider margin of disagreement than [Washington is] accustomed to.”