The steep hike in H1-B and L1 visa fees, which will cost Indian IT firms an additional $250 million annually, is sure to attract a whole lot of attention when US President Barack Obama meets India Inc’s top CEOs, over the weekend.

Top Indian IT executives are now preparing to squeeze in some pressure on Obama to reduce visa costs which are threatening to erode the industry’s profit margins. Infosys has said the rise in visa costs will impact it by around $3 million this year and Wipro said it will pass on the impact to clients.

India’s $60 billion IT outsourcing industry has traditionally won outsourcing contracts from large US clients, and often sends across IT professionals who then support the clients on-site on H1-B visas. The industry still derives about 60% of its revenues from US, though Europe’s pie has been growing in the past few years.

India has held the view that the increased visa costs?$2,000 for certain H1-B petitions and $2,250 for certain L1-A and L1-B visas?is discriminatory. The visa costs were raised so as to fund the Border Security Bill that allows certain measures to tighten security along the US-Mexico border. The Bill that came into effect from August 14 this year will ensure that the raised fee will remain in effect till September 2014.

Nasscom president Som Mittal told FE, ?Nasscom is not meeting the US President as a trade body, however, there are several business meetings and CEO forums happening where industry leaders will have an opportunity to meet him. The US delegation should go back with an assessment of the opportunity that we provide for the US. We are the solution, not the problem as we are creating jobs there.?

Obama was a big critic of outsourcing in his run-up to presidency. Hitting hard at the US taxation system, Obama said: “It’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.” Since making that statement, US has been steady with its protectionist measures with states like Ohio banning outsourcing altogether. Nasscom has been critical about the US moves but never had the kind of platform that an Obama visit provides. According to Nasscom, the Indian IT industry has created about 35,000 jobs for US residents in the last five years and has helped the economy in that country immensely.

Kumar R Parakala, global head of sourcing advisory, KPMG said, ?In the globalisation era, outsourcing or offshoring is quite an accepted phenomenon and companies and countries cannot avoid this. Outsourcing is an economic reality and businesses will do whatever it takes to be sustainable and profitable. It is an integral part of the global sourcing strategy and cannot be neglected.?

Wipro Technologies CEO Suresh Vaswani in a statement to FE said, ?Product innovation and CleanTech are two areas where a lot can happen between US and India. Collaboration in solar PV and solar thermal technologies would go a long way in making renewable power both affordable and scalable. It is very important that cross-pollination of ideas continues to happen and further impetus is provided to Indo-US academia and corporate collaboration.?