Computerworld — WASHINGTON - U.S. Secretary of State Hillary Clinton today called for a "dramatic expansion" in relations with India and offered what were mostly hints about the role of the H-1B visa program.

H-1B, Offshoring Supporters Get Key White House Posts

Clinton, speaking before the U.S.-India Business Council and an audience that included representatives from offshore outsourcing companies, described her plans for a new relationship with India in the same terms that would be heard in a course on technology marketing 101.

The U.S.-India relationship needs an "upgrade," Clinton said. She dubbed this new version of their relationship "U.S.-India 3.0" saying finally, "I want to put us in the solutions business."

Clinton appeared to lend indirect support to arguments raised by India's IT outsourcers that visa restrictions are a form of protectionism.

"Some Americans fear that greater prosperity and partnership with India will mean lost jobs and falling wages here in the United States," Clinton said.

Clinton didn't address the merits of the lost jobs/falling wages argument but, instead, urged both sides to "work through any issues in our relationships and differences in our perspectives by focusing on shared objectives and concrete results."

The Indian IT community and the Indian government have protested legislation introduced by U.S. Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.) that would set tougher prevailing wage standards, which may increase salaries for H-1B workers as well as impose limits on the number of visa workers to 50% of their workforce.

Wipro Chairman Azim Premji, one of the speakers at the event, said the India IT industry is "extremely concerned" about the Grassley/Durbin bill. He warned that the repercussions of trade protectionism will be disastrous.

The U.S. issues 85,000 H-1B visas a year under its cap, and although the U.S. has not met the cap for the next fiscal year, which begins Oct. 1, it is widely viewed as a short-term phenomenon due to the recession. U.S. companies have been shrinking IT employment across the board.

The argument raised in India against the Grassley/Durbin bill is based on the premise that work done overseas lowers costs for U.S. companies. The lower costs allow these U.S. firms to grow in other areas while expanding markets outside the U.S. because of the improved living standards created by these overseas jobs.

Meera Shankar, India's ambassador to the U.S., said that India's IT talent has helped U.S. firms become more competitive globally, while also creating jobs and "profits which can then circulate through the economy."

Opponents say the U.S. is sending high paid jobs overseas that aren't being replaced, and are using H-1B workers to put pressure on IT salaries. These arguments will likely take center stage during debate on the Grassley/Durbin bill. A hearing date has not yet been set.