Abstract

During the early 1990s, Indian IT companies utilized the favorable immigration regulations of the US to establish and build their business operations in the US market. These Indian companies made extensive use of the temporary visas to serve their clients in the US. However, after the 9/11 terrorist attacks in 2001, the US federal government tightened immigration regulations. In addition to the government taking steps to bolster security, it also raised concerns regarding immigration violations. There has been a wide scale debate on the growing number of illegal immigrants entering the country and the benefits received by them. The Illegal Immigration Reform and Responsibility Act of 1996 restricted the benefits for those immigrants who entered the US illegally. As of May 2006, there were 12 million illegal immigrants in the US. In 2005, there was a cap imposed on the issuance of H1B visas, which were limited to 65,000. These developments had a profound impact on the business operations of Indian IT companies as the export of software services to the US were a major source of revenue. According to NASSCOM, the Indian software and services export had revenues of US$ 23.6 billion in 2005-06. Further, immigration restrictions were expected to hamper the growth of the Indian IT companies and other countries that relied on the US as a major market. Despite these facts, there had been little effort to quantify the effect of the new policies faced by various US firms and Indian IT companies. Many US companies have opined that curtailing legal immigration and impeding the influx of foreign professionals to the US would likely hurt the competitiveness of the country and its economic leadership in the long run.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Business Process Outsourcing, Information Technology, Microsoft Corporation, US Citizenship and Immigration Services, NASSCOM, Immigration Act, Offshoring, Immigration Regulations, World Trade Organization, Programmers Guild, Department of Justice, Department of Labor, Center for Immigration Studies, North American Free Trade Agreement, India ITES Outsourcing , Immigration and Naturalization Service