As the US Government launched a probe against As per reports, the electric utility firm had laid off more than 500 technology workers to train replacements who were immigrants on temporary visas, known as H-1B, brought in by the Indian firms.
Meanwhile, the latest pact to be scrutinised is one with Walt Disney, which recently signed a deal with US-based
IT industry body NASSCOM said an investigation could have long-term ramifications on future contracts between US corporations and Indian IT firms and that it would intensify efforts to resolve the issue.
"Undoubtedly (these probes) would have a damaging impact on future business. It is a serious concern," NASSCOM President R Chandrashekhar told Economic Times.
He added this has the potential of seriously destabilising the way the sector does business. “Frankly, we are also dismayed by the way a hostile business environment is being created," Chandrashekhar told the financial daily.
Cognizant did not comment on the matter.
However, Indian IT companies vehemently denied the wrongdoing.
Communications and Information Technology Minister Ravi Shankar Prasad told PTI the government would intervene in this issue of alleged visa violations, if required. He said the government was confident that TCS and Infosys would address the matter.
Meanwhile, US media reports, citing Senators Dick Durbin and Jeff Sessions stated the US Labour Department planned to investigate whether top outsourcing corporations could use H-1B visa workers to replace fulltime technology workers.
"A number of US employers, including some large, well-known, publicly traded corporations, have laid off thousands of American workers and replaced them with H-1B visa holders. To add insult to injury, many of the replaced American employees report that they have been forced to train the foreign workers who are taking their jobs," the senators said.
India's $146-billion IT industry is struggling to match the explosive growth rates that it enjoyed in the 2000s amid volatile currency fluctuations that hammered profits and margins of all top Indian IT firms in the March quarter.
According to Computerworld, the Disney ABC Television Group cancelled a plan to farm out about 35 application developer jobs, amid a widespread outcry against outsourcing.
"Disney is also part of the overall investigation -it's quite worrying for Indian IT firms, since a lot of other contracts that are being signed now are also going to be in the spotlight," an analyst with a top US-based research firm told ET.
Experts said the debate on outsourcing will heat up in coming months with the US elections on the horizon.
Infosys and TCS issued statements saying they are fully compliant with US immigration and visa laws.
"Infosys is committed to complying with US immigration laws. The US Department of Labour (DOL) regularly selects a percentage of visa and labour condition applications for extra scrutiny in this industry, and we work closely with the DOL to assist them in this activity in the ordinary course of our business. We have received no indication of any broader investigation of Infosys visa practices," Infosys said. TCS said that the company "maintains rigorous internal controls to ensure we are fully compliant with all regulatory requirements related to the US immigration laws."
(Image: Indiatimes)