Home ArticlesSpecial Articles

H-1B visa reform: Fresh bill may hurt Indian IT cos

H-1B visa reform: Fresh bill may hurt Indian IT cos

Washington/New Delhi: A new reform bill that seeks to make certain changes to the H-1B visa grant mechanism may hurt Indian IT companies, as it may prevent outsourcing of jobs apart from undercutting American wages, reported The Business Standard.

The new legislation, introduced by the US Senate, has the support of major tech giants such as Microsoft, Facebook, and others.

The bill seeks to increase the annual H-1B visa quota - a move to facilitate the migration of skilled labour to the US.

It may be noted that the Immigration Innovation (I-Squared) Acr 2018, introduced by Republican Senators Orrin Hatch and Jeff Flake, asks for increasing the number of H-1B visas allotted to 85,000 from the current 65,000.

The bill also talks about creating a plan that allows issuance of such visas based on market demand. 

The H-1B visa is a lifeline for lakhs of skilled Indians and immigrants from other countries to freely work in the US.

It has a validity of three years, and can be further renewed for three more.

As mentioned earlier, the new bill prevents outsourcing of jobs or undercutting US wages - a move that is expected to hurt Indian IT companies, which depend heavily on both the factors.

It also allows the US government to reap as much as one billion dollars from increased visa fees to fund science, technology, engineering and mathematics (STEM) education, apart from training workers in the country, the BS report added.

Apart from that, the new bill also allows workers on H-1B visa to shift jobs without affecting their legal status in the US. 

The higher salary challenge and the threat of increased brain drain could be a big setback for Indian IT services companies, indicated experts.

Experts feel that Google, Microsoft, and Facebook are "natural supporters" of the H-1B visa as they are beneficiaries.

They also feel that an increase in minimum salary to $1,00,000 could be a big hindrance for Indian IT corporates as the number of people going to the US from TCS or Wipro will come down significantly.

Local hiring will increase, but skilled talent from India would be acquired by Microsoft, Google, Facebook and other large companies due to the minimum salary clause in the new bill. 

As a result, brain drain will increase significantly, and Indian IT companies may lose ground due to difficulties in meeting the minimum wage clause, as mentioned in the new legislation. Since the subject of H-1B visas came under the scanner, Indian IT firms have significantly increased local hiring in the US, rather than being dependant on the H-1B visas.

Industry body NASSCOM or the National Association of Software and Services Companies has also rejected the new visa theory, demanding a more liberal visa regime to allow better labour fluidity from India fill the technology gap in the US.

It may be noted that this is not the first time Republican Senators have made an attempt to introduce this new piece of legislation.