H-1b visa issue: Nasscom team heads to US to talk to Donald Trump administration

New Delhi: A delegation of IT industry body Nasscom will be in Washington DC today to engage with members of the new US administration on issues like clampdown on work visas and flow of skilled manpower between the two nations.

“We will be in Washington DC between February 23 and March 2,” Nasscom President R Chandrashekhar said. The delegation, which is slated to meet Senators and Congressmen, will highlight and share information on direct jobs being created by Indian IT companies in the US and their contribution in making the American economy competitive.

Concerns around a proposed overhaul of the visa regime by the US has prompted Nasscom to postpone its annual forecast – for the first time – till May. Chandrashekhar said the delegation will include senior members of the industry, including Tech Mahindra MD and CEO CP Gurnani.

Any changes in the visa regime may result in higher operational costs and shortage of skilled workers for the US $110 billion Indian outsourcing industry. Indian IT sector, which contributes 9.3 percent to the country’s GDP, is one of the largest private sector employers at 3.7 million people. The US accounts for nearly 62 percent of the exports, while EU is the second largest market for the Indian IT services exporters contributing about 28 percent.

According to Nasscom, Indian IT industry has created 1.55 lakh direct employment in the US. Recently, a US legislation (Lofgren Bill) has been introduced that proposes doubling of the minimum wages of H-1B visa holders to US $130,000. The current H-1B minimum wage of US $60,000 was fixed in 1989 and has since remained unchanged. Any protectionist stance by the US could also spell more trouble for IT firms that are already facing strong headwinds from currency fluctuation and cautious client spending.

The Ministry of External Affairs has said India’s interest and concerns on the issue have been conveyed both to the US administration and the US Congress at senior levels. Analysts are of the opinion that Indian companies could easily witness around 60-70 percent rise in salaries of the H-1B visa dependent workforce, which could lead to a 5-10 percent hit on the margins, depending on the total base of employees currently on H-1B visas.

Global tech titans like Google CEO Sundar Pichai, Microsoft chief Satya Nadella, Apple’s Tim Cook and others have already voiced their concerns on the issue.