Indian tech companies brace for visa impact

Indian H-1B workers in the US, who number about six lakh, face an uncertain future. Also, US companies will face a shortage of skilled workers if the proposed overhaul of US visa rules comes through.

On the proposed doubling of salaries to H-1B visa-holders, Nasscom president R Chandrasekhar said, “It  will become the criteria for Indian companies to apply for new visas. Everybody who is working there will not get the hike in the salary.” Chandrasekhar said the proposal was still in the draft stage.

“We can’t say how many people will be affected by the legislation. The effect will be more in terms of how many visas are to be issued and how companies frame their approach towards H-1B workers,” he told DH. Chandrasekhar said Nasscom is yet to take up the issue with the government. “We have already held negotiations with the Ministry of IT and are planning to go to the US in the month of February. Nasscom will hold a formal meeting with lawmakers,” he said.

Out of total 65,000 H-1B visas issued in 2014, TCS leads globally with the allocation of 8.69% of them, followed by Infosys (5.31%), Wipro (4.69%) and Tech Mahindra (2.74%).

As the news about proposed changes in US visa rules broke, TCS, Wipro and Infosys shares dropped by up to 4.47%, followed by technology shares which tanked 2.49% and dragging down the BSE IT index by 2.96%.

Ashok Soota, executive chairman of Happiest Minds Technologies and a veteran of the Indian IT sector, said the development was just a Bill which will go through a lot of debates. “IT industry should adapt to the changes and make it an opportunity. Also, Indian companies should give emphasis on product development so that we can go up in the value chain,” he said.

Commenting on the development, Angel Broking’s vice president (Research and IT) Sarabjit Kour Nangra said the hike in H-1B visa cost will have a significant impact on the financials of the Indian IT companies.