According to sources in a major shock to Indian community aspiring to go to the US, the US President Donald Trump's government has tightened H-1B work visa norms which in turn may burn the profits of the Indian IT service firms further. Meanwhile US' fresh move is expected to put cost pressures on the Indian IT services firms and impact their margins due to increase in compliance and rise in onsite hiring and moreover the impact will be company specific and relative to H-1B visa dependence.
Gaurav Jain, vice-president, corporate sector ratings, Icra, a rating agency said "The changes will disqualify certain positions currently eligible for H-1B visas, thereby impeding the movement of low cost skilled labour from India and will have direct bearing on margins”. Moreover the US is also contemplating on awarding visas to the most skilled or to highest-paid beneficiaries. Accordingly Icra feels this move will work against the Indian IT services sector (H-1B dependent) as the average wage is approximately lower by 25% compared to companies that are not dependent on H-1B visas as per estimates.
Furthermore a firm is defined as H-1B dependent if more than 15% of its US
full-time employees are on an H-1B visa. He said the increased onsite hiring or
raising the compensation for H-1B visa applicants will impact companies' margins
and will be credit negative.
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