The Bill adoption is not guaranteed as it differs sharply from a tougher version passed by House of Representatives, and the two must now be reconciled.

Although the H-1B increase was strongly backed by the US tech industry, it was vehemently opposed by protectionist lobbies. Because the House Bill does not have the numbers doubling clause, the row is expected to continue to the final stage when the two chambers meet over the next few days to come to a compromise.

Once approved by the House of Representatives the new quotas would be effective from 2007.

Although President Bush backs the Senate version of the Bill that was approved 62-36, the Indian IT community, which takes up roughly two-thirds of the quota is not jubilant as yet.

"This is a good step but it is too early yet to react -- let’s wait and see. The Senate-passed bill will now have to be harmonised with the bill passed by the House in December. The bigger challenge is in the House. We were expecting this at the Senate but we would be happy if the House also passes this,” Kiran Karnik.  the national association of software and services companies (Nasscom) President said.

The Indian IT industry has been reeling under the artificial cap of 65,000 H1-B visas.  Although the bigger IT companies were not too troubled by this because they had factored this in at the beginning of the year, it was the smaller companies and start-ups that were feeling the crunch.  On the other side, the US firms were also feeling the pinch of IT engineers not being able to come for onsite work.

Says Anil Kumar, a software engineer with a medium sized IT firm which was not able to get two H-1Bs last year,  “I would be happy only if it passed by the House – the Senate proposal doesn’t mean that the number of visas are actually doubled now.”

While the H-1B provision is of interest to India because of the large number of skilled workforce there, it is a minor clause in the larger scheme of things. The Senate Bill proposes the most sweeping immigration reforms in decades, offering means for millions of illegal immigrants to stay on in the US and eventually become citizens. The US is home to about 15 million illegal immigrants.

In the meantime, America’s IT industry has signaled victory with Microsoft’s Bill Gates issuing a statement hailing the Senate move. “By passing (the) comprehensive immigration reform legislation, the US Senate has taken a critical step forward in its important work to ensure that our nation remains the global leader in technology innovation,’’ Gates said.

A fierce fight is expected between the Senate and the House. And, the dimensions of the battle are likely to be radically different with the elections later this year.