The number of applicants seeking H-1B visas has dropped significantly with the US Citizenship and Immigration Services (USCIS) receiving only 199,000 petitions for 2017, compared with 236,000 in 2016, reflecting the impact of the recent protectionist measures undertaken by the American government. This is for the first time since 2013 that the number of H-1B petitions has dropped below the 200,000 mark. This comes in the wake of US President Donald Trump planning to issue an executive order to overhaul the existing immigration system with a special focus on making the entry of knowledge professionals even more stringent.
H-1B visas are the key work permit for the Indian IT industry, especially for large companies such as TCS, Infosys, and Wipro, to execute their business in the US. Indian IT companies have been till now the largest recipients of these visas, which are capped at 65,000 annually.
The $155-billion Indian IT industry has faced numerous restrictions on the use of H-1B visas of late. The USCIS had recently clarified that an entry-level computer programmer would not generally qualify as a position in a specialty occupation. The H-1B visa programme is designed to bring highly-skilled workforce into the US as a specialty occupation, given the shortage of these technical skills. It also announced multiple measures to further deter and detect H-1B visa fraud and abuse. There is also a six-month suspension on the premium processing of H-1B visas.
The above-mentioned measures are unlikely to have immediate impact on the Indian IT industry but many of them are awaiting the final outcome of the regulations. Besides, there are various legislative proposals for severe restrictions on IT outsourcing and the use of H-1B visas.
Infosys CFO M D Ranganath, in a recent interaction with media persons, had said, “They are proposals at this stage with different levels of impact. Which one will be adopted we do not know. So we will have to wait and watch.”
These measures are unlikely to have any immediate negative impact on the Indian IT companies but will only make them more cautious in their approach towards the use of H-1B visas, industry observers said.
Nasscom, the Indian IT industry’s trade body, has consistently stated that the H-1B visa system exists specifically because of the persistent shortage of highly-skilled domestic IT talent in the US and Indian companies will continue to provide skilled talent and solutions to fill that gap and keep US companies competitive globally. Nasscom has also said that evidence reveals that the jobs undertaken by the Indian IT companies are complex or specialised and require professional degrees.
Indian IT companies have come under increased scrutiny on the use of H-1B visas as there is a perception that they are taking away jobs of skilled American workers through the import of low-cost resources. Besides the US, other countries such as the UK and Singapore have also initiated fresh measures which makes its difficult for the movement of Indian IT professionals.
However, an increasing number of Indian IT companies are expanding their presence at their client locations. Sanjoy Sen, doctoral research scholar, Aston Business School, UK, said, “In the medium term to longer term, though, the impact of this will be significantly reduced through higher recruitment in the overseas subsidiaries of the Indian IT companies, for which most of them have already initiated steps for overseas recruitment drives, with higher prices being charged to US/UK clients.”