- The Washington Times - Tuesday, September 5, 2000


When India's Prime Minister Atal Behari Vajpayee arrives in the United States this week on a 10-day trip, he comes here both as the head of a new nuclear weapons state and also the leader of a rising information technology power.
India has matured into a considerable digital force in the past decade, a development that has important implications for the United States and the Western world. Washington needs to engage the Indian leader with this in mind without being fixated by its non-proliferation agenda.
While Israel, Ireland, Russia and the Philippines all produce much-needed hi-tech professionals, India remains the primary source of knowledge workers and intellectual capital that is driving the new economy. To meet the shortage of such workers in the United States, the Clinton administration has raised the cap on H1-B visas to 107,500 and legislation is afoot to increase the limit to 200,000. Last year, nearly half the H1-B visas issued by the United States to high-skilled foreign workers went to Indians. Demand for skilled hi-tech personnel has forced Germany to change its immigration policies. France, Japan and Australia are courting hi-tech Indian workers, as well.
Thus far, Washington has had a monopoly on skilled foreign workers. The United States alone has attracted some 500,000 well-qualified Indians in the past two decades. According to one estimate, nearly a quarter of all Silicon Valley startups involve Indians or Chinese, with the Indians dominating the software sector and the Chinese preferring hardware areas. The market capitalization of companies founded or headed by Indians in the United States is more than $500 billion. They include such storied names as Sun Microsystems, Cirrus Logic, Hotmail, and Sycamore Networks.
Large American firms like Microsoft, Oracle, Hewlett-Packard and Cisco also employ a huge Indian work force, upwards of 10 percent, here in the United States. Because of difficulties in the passage of immigration laws that would allow greater inflows, these companies are also transferring operations and jobs to India. Dozens of U.S. companies now have Indian subsidiaries or branches, where Indian engineers and programmers work for lesser wages than the firms would have paid to U.S-based workers.
While one might argue that this transfer of work is depriving American workers of jobs, there are mitigating factors: The outreach is not only stemming the tide of immigration, but spreading American influence and helping swell the kitty of U.S. corporations with profitable results for the large American stock-trading population. The transfer has also brought about the death of distance and created a 24-hour economy. Many of the jobs are low-paying, low-skilled jobs such as billing and call centers that benefit from round-the-clock attention. And finally, there is no evidence to show that Americans are being deprived of jobs.
The latest surveys show that the United States still has several hundred thousand skilled jobs that are unfilled and the numbers will continue to grow as the new economy creates more jobs. Overall unemployment is also at a record low.
Because American interests are becoming linked to India and vice versa, security in the region becomes a more direct concern of Washington. The kidnapping last month of a film star by a bandit brought the Southern Indian city of Bangalore India's Silicon Plateau to a standstill. The tremors could be felt all the way to Wall Street.
Just as the United States has become inextricably linked to trade with China, it is being drawn into a binding commercial relationship with India. But there are important differences. U.S. trade links with India depend more on technology and human intellectual capital than on mass manufactured goods as is the case with China. American corporations like Texas Instruments and General Electric are developing cutting-edge software in India. Microsoft has its only development center outside the United States in the Indian city of Hyderabad, euphemistically called Cyberabad. Recently, the Dutch electronics giant Philips moved its entire software development unit to Bangalore. And only last month, Cisco announced a $150 million R&D; facility the largest outside the United States in the same city.
Luck has favored India in its emergence as a rising hi-tech power. Its uncontrolled population growth has given it vast human resources. Indians have done it to some extent by emphasizing higher technical education at the cost, it may be mentioned, of primary education. Its colonial past has helped it become the largest English-speaking country outside the United States.
Since English has become the default language of the new economy if not that of the world it stands to reason that India has today's hottest export item: skilled English-speaking workers. India also has other great attributes a Western system of justice and rule of law that it inherited from the British and has built on during 54 years of unswerving fealty to democracy. All this makes India a more attractive partner to the United States than China.
The mutually beneficial engagement between the United States and India has come about thus far largely because of globalization, with very little political or strategic direction or input from Washington. Mr. Vajpayee's visit provides the United States a great opportunity to right its historical negligence. The issue of nuclear non-proliferation, enmeshed in a congressional and geostrategic quagmire, can be on the backburner for the moment.

Chidanand Rajghatta is the U.S. correspondent of The Indian Express and author of the forthcoming book, "The Horse That Flew: How Indian Silicon Gurus Spread Their Wings."

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