It?s not just the US which is raising barriers for the Indian IT industry. Protectionism has reared its ugly head in other developed countries as well, driving up onsite people costs for companies. Revisions in minimum wages and changes in immigration laws in the UK, Switzerland, Canada, UAE and Singapore have led to cost escalation of $250-450 per person every month. Company executives said the impact would be felt in FY12 as new laws take effect.

The UK introduced new immigration fees last month. Only those who earn ?40,000 or more will be able to stay in the country for more than a year under the Intra-Company Transfer route; earlier, there was no such minimum wage. Effective July, Singapore is raising thresholds for three categories of ?employment passes? ? Q1, P1 and P2.

The salary threshold for Q1 are being hiked from S$2,500 to S$2,800; that of P2 passes from S$3,500 to S$4,000 and for P1 passes, the new threshold is up from S$7,000 to S$8,000.

Switzerland has now suggested salaries based on age, experience and location while Canada requires IT employers to apply for a ?Labour Market Opinion? (LMO) when hiring foreign workers ? a system that assesses the impact of a foreign worker on Cana-dian jobs.

?A positive LMO will show that there is a need for a foreign worker to fill a position. A work permit can be submitted for processing only on receiving a positive LMO. While applying for the work permit, the wage rate for all skill levels must be consistent with the wages being paid to Canadians working in the same occupation and geographical area,? Samir Gadgil, head of Compensation and Benefits at Wipro Technologies said. Apart from comparable wages and salaries, all benefits provided to Canadian workers or permanent residents have to be extended to foreign workers as well, he added.

Wipro has revised its policy in line with the new regulatory requirements. In the March quarter, the firm reported near-flat operating margins as the gains on the currency front were neutralised due to the impact on onsite people costs. ?We had already factored in an average onsite cost hike $400 per person. If you are able to move more work offshore, or if you are in a business where there is less requirement of people locally, then you may get less effected,? CFO of Wipro Technologies Manish Dugar said. ?It is about managing the supply-chain better now,? he added. IT companies, for instance, are expected to be more judicious while sending employees on long-term work in the United Kingdom.

Executives from other firms said that Indian services companies should learn to bill customers higher, since there is no other option. CFO of Infosys Technologies. V Balakrishnan said the price increase will take care of the increase in onsite costs. ?The best scenario would be to do more offshoring, but certain parts have to be onsite. Onsite billing rates are now going up,? he noted. He expects more countries to turn protectionist, with unemployment ruling high in developed markets.

The worldwide economic slowdown triggered strict immigration control rules even in areas which did not have such rules ? the Middle East is an example. Samir Gadgil of Wipro notes that the firm had to change its internal processes to meet new norms in the UAE. A new ?Wage Protection System? has been introduced in Dubai mainland, with many implications for the Indian IT industry. Salaries are now monitored by the central bank and regulatory authorities in Dubai; the basic salary can?t be less than the mentioned amount in employee work permit. ?The minimum basic salary norm for processing the work permit is 3000 AED. Employees traveling on Mainland Visa, even for less than 90 days would be considered under payroll process,? Gadgil noted.