Despite temporary relief on H-1B visa, Indian companies get cautious on applications

While Infosys has decided not to apply for H-1B visas for junior employees this year, TCS had cut down its applications by almost 85%

File picture of Infosys Founder Narayana Murthy with Former Chairman of the Unique Identification Authority of India, Nandan Nilekani (Picture for representation purpose only)

File picture of Infosys Founder Narayana Murthy with Former Chairman of the Unique Identification Authority of India, Nandan Nilekani (Picture for representation purpose only)

Photo Credit: Infosys

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As the US Citizenship and Immigration Services (USCIS) authority gears to accept H-1B visa applications from April 3, 2017, the news of the department not changing the visa norms this year, has brought little cheer to Indian IT services companies.

The rules remain the same

For the FY2018, there will be no change in the Congressional mandated limit of 65,000 H-1B visas in the general category. The 20,000 limit for foreign students who have done masters or higher degree from a US academic institution too stays for this year.

The development was confirmed by Indian Commerce Minister Nirmala Sitharaman, today, who said in the lower house of the Indian parliament that the United States has conveyed to India that there is no significant change in the H-1B visa regime.

She said that India is articulating its concerns regarding the visa policy vigorously with the new administration in the US. “The fear, at least for 2017, is not proved to be correct. They (US authorities) are saying their current priority is to deal with the illegal immigrants,” the Minister said during Question Hour.

Indian companies cautious

Around 85,000 H-1B visas are allotted a year, of which nearly two-thirds of H-1B visa applicants are Indian nationals who either work for Indian firms — like Tata Consultancy Services (TCS), Wipro and Infosys — in the US, or the local operations of US firms such as Accenture, IBM and Google. The reforms Bill, introduced earlier this year proposes for doubling the minimum salary of H-1B visa holders to $130,000, which is more than double the current amount of $60,000, established in 1989.

The Bill if passed could leave hundred thousands of Indians jobless and the Indian companies in the US scampering for talent at a higher cost.

Read More: H-1B visa issue: Is Indian IT services industry heading for a crash?

But despite the no change in rules this year, Indian IT services companies are playing with caution. Infosys, which according to MyVisaJobs.com, is the largest sponsor of H-1B visas in the US and had in FY2016 filed 25,405 Labor Condition Applications (LCA) for H-1B Visas, has decided not to apply for H-1B visas for junior employees, this year.

A report by The Economic Times, quoted an Infosys executive as saying, “The company is not applying for visas for employees with under four years of experience. We are talking to clients about offshoring more work to India, and the work done by junior employees can be brought to India.”

Another company executive told the business publication that some Infosys clients have started asking for fewer H-1B employees deployment onsite on their projects, and the company is looking to hire more onshore people to deal with the issue.

Infosys officially has not commented on the development.

The publication also noted that TCS, had operated in a self-imposed visa-constrained environment this year and had applied to get only about 15% of the visas for which it normally applies. According to MyVisaJobs.com, TCS in FY2016 had 13,134 LCAs in FY2016 as compared to 16,553 in FY2015. The figures for FY2017 are not yet known.

Read More: The positive side of H-1B Visa reform: Will India brain-gain?

Similarly, Infosys too saw its LCA figures coming down in FY2016 to 25,405 from 33,289 in FY2015. Wipro too saw a southward trend in LCAs in FY2016 at 10,607, down from 12,201 in FY2015. However, another Indian firm, Tech Mahindra saw an upward trend in FY2016 with 8,615 LCAs as against 6,041 LCAs in FY2015.

Wipro chairman Azim Premji had last week met Indian IT minister Ravi Shankar Prasad to discuss the visa and the company’s involvement in the domestic IT market.

The US accounts for over 60% of the Indian IT export revenues. For Wipro, the US contributes over 55% to its revenues.

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