H-1B visa changes will hit US too: Nasscom

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 US,” Nasscom presid­ent R Chandrashekhar said.

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 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 & 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.

A hit beyond this threshold would force 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,” he ad­d­ed. Besides, such an annou­n­cem­e­nt can also impact the gross domestic product and the overall business and economic growth of the US.

Compounding the troubles for the Indian tech sector is another US bill, Prot­e­ct and grow American jobs (HR170), which proposes n­e­w rest­r­i­ctions to prevent misuse of H-1B visas. It tightens the definiti­on of visa-dependent fir­ms, and imposes fresh cu­rbs in terms of minimum salary and movement of talent.

Visa dependent firms will have to raise minimum salary for H-1B visa holders from $60,000 to $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 te­nure of 5-6 years. The bill, passed by the US house judiciary committee, is now headed for the senate.