NEW DELHI, INDIA: In the backdrop of the global economic recession and the protectionist measures adopted by the US administration, a NASSCOM team recently visited the US and held meetings with the US administration, elected representatives of the Congress, various associations, US headquartered companies etc.

The team raised various issues concerning India, including the H-1 B visa issue and the protectionist measures adopted by the US administration.

The Obama administration in the US had recently announced protectionist measures such as the “Buy America” clause, discussion on removal of tax benefits for companies creating jobs outside the US and proposed H1B legislation, giving rise to speculations and concerns as to how this will impact developing nations like India, which depend on outsourced works from the US.

During its US visit the NASSCOM team raised the need for global collaboration if the world is to come out of this economic downturn quickly, said a press release.

Measures such as closing borders for trade and promoting protectionism presents a serious risk to the world economy today, it said.

The United States has been leader in international trade, and in 2008, more than 50 per cent of the revenues of large US companies came from outside the country. Globalization and global sourcing has helped US companies gain technology and innovation edge and access to the best resources globally, the release added.

The team, during its meetings with the US representatives pointed out that the Indian IT-BPO industry has played a crucial role in helping US companies tap these benefits and remains committed to being a part of the solution to help tide over this crisis.

It is imperative that the US and all countries continue to be proponents of free trade. With more countries impacted with the slowdown, such protectionism would trigger similar protectionist measures, it warned.

Though NASSCOM does not think that the “Buy America” clause or the discussion on removal of “tax breaks for US companies that create jobs offshore” provisions in their current forms will have any impact on the Indian IT-BPO industry, it is concerned about the proposed amendment to the H-1 B visa legislation.

Contrary to popular belief of Indian companies taking majority of H-1 B visas, the Indian IT industry constitutes only 11 per cent of the total visas issued in 2008, said NASSCOM. These H-1 B visas are used for providing technically qualified talent, open new markets, accelerate innovation and increase competitiveness.

NASSCOM said it had a healthy discussion with Senator Charles Grassley from Iowa who is spearheading the H-1 B legislation and will be working with him to stop any fraudulent use of H1-B visas, and to make sure that legitimate business users are not affected.

Meanwhile, a recent World Bank report warned that the global economy is likely to shrink this year for the first time since World War II and developing countries face a financing shortfall of $270-700 billion this year, with the sharpest losses in East Asia.

In this context World Bank Chief Economist and Senior Vice President Justin Yifu Lin also suggested that developed countries should spend some of their fiscal stimulus in developing countries as the economic effect could be significant.