Home > Article > ‘Indian IT Chop-Shops’: US Restrictions on Delhi IT firms

‘Indian IT Chop-Shops’: US Restrictions on Delhi IT firms


‘Indian IT Chop-Shops’: US Restrictions on Delhi IT firms

WASHINGTON: Whatever the state of political and diplomatic play between Washington and New Delhi, business ties and private sector partnerships between the two countries have long been praised for elevating the relationship. But that equation may now be coming under stress, after a prominent US Senator stunned the corporate world on both sides by likening India’s most storied I-T firm to a “chop shop” — a term used to describe a business involved with the selling of stolen goods.

The disparaging remark about Bangalore-based Infosys by New York Senator Charles Schumer came during discussions on a $600 million border security bill that has already created a kerfuffle among Indian IT companies because it is largely underwritten by a 200% hike in visa fees in categories such as H1B and L-1.

As if sticking the Indian firms with the tab wasn’t bad enough, Schumer had this to say: “The emergency border funds will be paid for by assessing fees on foreign companies known as chop shops that outsource good, high-paying American technology jobs to lower wage, temporary immigrant workers from other countries. These are companies such as Infosys. But it will not affect the high-tech companies such as Intel or Microsoft that play by the rules and recruit workers in America.”

A chop shop is a slang phrase for an illegal location or business which typically dismantles stolen automobiles for the purpose of selling them as parts. It may also be used to refer to a location or business that is involved with the selling of stolen goods in general, or a brokerage that sells non-existent equities, both fraud and stolen goods. Another common use refers to a business whose product, service or equipment is of questionable quality.

The charitable explanation for Schumer’s remark was that he may have meant body shop, which is still a pejorative term and used to describe consultancy firms that recruit IT workers and bring them to the US and house them here before contracting out their services for short-term projects. But Infosys does not fall in this category.

In fact, the company, like other Indian IT majors such as TCS and Wipro, has created tens of thousands of jobs in the US. Infosys alone has 12,000 employees in the US and many of its employees in India are products of the US education and corporate system.

But such is the pressure on American politicians at a time of economic decline and a shrinking job market that they are lashing out indiscriminately. President Barack Obama himself has set the tone by frequently referring to Bangalore and using it as a metaphor responsible for American economic woes. TOI

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  1. August 11, 2010 at 8:16 pm

    Completely agree. What Indian politicians and companies should be worried is the declining cost arbitrage of outsourcing. Read on http://wp.me/pV9Cw-as

    Cheers Vyshali

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