- Higher minimum salary for H-1B visas will hit margins of IT firms
- US is the biggest export market for Indian IT companies
- It accounts for 60% of India IT companies export revenues
(Also Read: H1B Visas: 10-Point Guide To What Trump Wants To Change - And How)
The BSE IT index, which is a benchmark of IT stocks, fell over 4 per cent. Shares of outsourcing giant TCS fell 5.6 per cent, Tech Mahindra 9.7 per cent, HCL Tech 6.3 per cent, Infosys 4.6 per cent and Wipro 4.23 per cent.
Indian companies have been hiring more US citizens in anticipation of H-1B visa curbs. But employing more US citizens will significantly raise the cost for Indian outsourcers, thus impacting their margins and overall profit.
The Indian IT industry is already battling slowing growth amid big changes in the technological landscape (like automation and artificial intelligence) and global headwinds like Brexit. (Read: Indian IT sector warns against US visa bill)
US President Donald Trump is set to sign a new executive order aimed at overhauling programmes like the H-1B and L1 that will make it tougher for foreign workers to get work visas.
The High-Skilled Integrity and Fairness Act of 2017 introduced by California Congressman Zoe Lofgren in the US Congress proposes to remove the 'per country' cap for employment based immigrant visas so that all workers are treated more fairly and to move to a system where employers hire the most skilled workers without regard to national origin. The legislation sets aside 20 per cent of the annually allocated H-1B visas for small and start-up employers (50 or fewer employers) to ensure small businesses have an opportunity to compete for high-skilled workers, while still protecting against outsourcing
The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise in specialised fields. The technology companies depend on it to hire tens of thousands of employees each year. (With Agency Inputs)