Any disruptive move on the visa front will be detrimental for both India and the US, with reports suggesting that Washington may be mulling new rules to prevent H-1B visa extensions, software body Nasscom has said. Estimates show that such a move could lead to deportation of over one million H-1B visa holders in the US — many of them Indians — who are waiting for their green cards. “It is not only about the Indian IT industry but about all Indians who use H-1B visas… Given that there is a real problem of shortage of skilled professionals in the US, any disruptive move will be detrimental for both India and the US,” Nasscom President R Chandrashekhar told PTI.
He was reacting to reports suggesting that the US Department of Homeland Security is considering new regulations, which will prevent H-1B visa extensions during pendency of green card approvals. In other words, if this materialises, the move would prevent foreign workers in the US from keeping their H-1B work visas, while their green card application is under processing. This is being seen as part of US President Donald Trump’s ‘Buy American, Hire American’ campaign that seeks to bring back jobs to the country.
“It is one more step in a series of steps seen over the last one year. While each one individually may have a small impact, cumulatively the impact becomes very significant,” Chandrashekhar said. Meanwhile, Mahindra Group chief Anand Mahindra sought to soothe frayed nerves in a tweet that read “If that happens, then I say ‘Swagatam, Welcome Home.’ You’re coming back in time to help India Rise”. According to Nasscom, the use of visas by Indian IT firms has fallen by 50 per cent in the last two years and that the number now stands below 10,000 (of the 85,000 H-1B visas issued annually).
To brace against the impact, Indians IT firms have also been ramping up local recruitments and training manpower in the US. Greyhound Research Chief Analyst, Founder and CEO Sanchit Vir Gogia said changes in the H-1B visa arrangement will add immense cost pressures on Indian IT companies. “The average margin hit for an IT services provider will be in the range of 5-10 per cent year-on-year, depending on the total base of employees currently on H-1B, the existing compensation and need for onsite in near-term,” he said.
He added that a hit beyond this threshold will force these firms to “either re-negotiate contracts with existing clients or else the street will act ruthlessly and these firms stand to lose potential ground on market capitalisation”.
Besides, such an announcement can also impact the GDP and the overall business and economic growth of the US. Compunding the troubles for the Indian tech sector is another US Bill — Protect and Grow American Jobs (HR170) — that proposes new restrictions to prevent misuse and abuse of H-1B visas. It tightens the definition of visa-dependent companies, and imposes fresh curbs in terms of minimum salary and movement of talent.
Visa dependent companies will have to raise the minimum salary for H-1B visa holders from USD 60,000 to USD 90,000 under the proposed Bill. Also, it places the onus on clients that they will certify that the visa holder is not displacing an existing employee for a tenure of 5-6 years. This bill has been passed by the House Judiciary Committee and is now headed for the US Senate. Nasscom has been of the view that this proposed legislation has conditions which are extremely onerous and will make it very difficult for people to not just get the visa but also on how these work permits can be used.