H1-B Visa Delay May Leave Indian IT Sector In Limbo

by CXOtoday News Desk    Mar 06, 2017

The USD150-billion Indian IT industry is already facing several threats under Donald Trump presidency and the latest decision by the United States Citizenship and Immigration Services (USCIS) to halt expedited processing of H-1B visas from April 3, would bring further disrupt the plans of thousands of immigrant workers. The decision to suspend the “premium processing” option, citing a backlog of applications, will lead to process delays, to as long as six months, for Indian IT companies, believe experts.

H-1B visas allow employers to bring in skilled foreign workers; about 85,000 will be given out this year. The visas are in high demand and given out by lottery. Under the premium route, companies can get H-1B visa application processed in 15 days by paying additional fee of $1,225 against three to six months under normal circumstances. April onward, the IT services firms cannot send their employees on urgent projects, which in turn would add to the existing uncertainties of pricing pressure for the large Indian IT services players, believe experts.

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More pressure on Indian IT firms

According to experts, the move would also put pressure on Indian IT companies as any changes in visa regime may result in higher operational costs and shortage of skilled workers for the Indian outsourcing industry.

Notably, the decision was announced hours after Foreign Secretary S Jaishankar and Commerce Secretary Rita Teotia held meetings with officials in the US to view the H1-B visa issue as a trade and services matter, and not an immigration one.

The US accounts for over 60 per cent of the Indian IT export revenues. Indian IT companies have gained since long from H-1B work visas for transfer of skilled workers. Industry estimates place the total number of Indian engineers on H-1B visas in the US at 300,000-350,000.

This includes employees of Indian tech companies such as Infosys, Tata Consultancy Services and Wipro, as well as those employed by US multinationals like Accenture, Google and IBM, who send engineers to work on projects in the US. 

Read more: Proposed US H-1B Visa Policy May Hurt Indian IT

USCIS’ decision to suspend processing of premium H1-B visas from April 3 would lead to process delays for Indian IT firms, acknowledged industry body Nasscom. “The current issue of the temporary suspension of premium H-1B processing will create some process delays for the companies – Indian and American,” Nasscom said.

The IT lobby also assured that it would work with the US Embassy in India to ensure that the movement of professionals is not hit by such process issues.

However, concerns remain in the IT and business fraternity. Trump had earlier accused companies of abusing the H-1B program as a way to hire foreign workers who take jobs away from Americans, at lower salaries. Earlier, an executive order issued by the US government read: “Our country’s immigration policies should be designed and implemented to serve, first and foremost, the US national interest,” the draft proposal reads: “Visa programs for foreign workers…should be administered in a manner that protects the civil rights of American.”

The road ahead for IT cos

India’s IT companies including  Tata Consultancy Services Ltd, Infosys and Wipro, pointed out that they are serving corporations become more competitive by specialized staff for technology operations. They also said the visa programs allow them to keep jobs in the US and that if they have to pay more for staff, they will handle more of the work remotely from less expensive markets like India.

Read more: Donald Trump’s Win: What It Means For Indian IT?

Experts believe the move would slow down onsite deployment of skilled professionals from India and hence it would require Indian companies to better plan onsite staffing of critical resources, as the move would mean longer waiting time for employees to be deployed at client locations.

“This slows the professional down by three months. The impact will call for a lot more forward planning for companies. In many cases, H-1Bs are often needed quickly so this will create significant difficulties for India IT firms dealing with US clients. I anticipate a huge influx of visa application between now and April 1,” Phil Fersht, chief executive at research firm Horses for Sources, told ET [Read the full story here]

Earlier this year, the heads of Google, Facebook, Microsoft, Twitter and several others have been voicing concerns over the executive order on immigration from President Donald Trump that banned nationals of several Muslim-majority countries from entering the US, which they believe would affect their own employees working in the country. 

The technology companies of Silicon Valley for years have relied on a steady flow of skilled engineers from different parts of the globe to help them build their products and solutions. Now many of those companies and their workers are dreading further changes to their immigration policy under President Trump that they believe could hurt their ability to tap the technical talent to stay competitive.