Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

BLOG: India's growing visa problem

Patrick Thibodeau | June 22, 2011
For most of the last decade, India's large tech outsourcing firms have had little trouble getting H-1B visas. This is changing.

For most of the last decade, India's large tech outsourcing firms have had little trouble getting H-1B visas. This is changing.

A research report by CLSA, a brokerage and investment group focused on the Asia-Pacific market, believes visa restrictions are "piling up" in the U.S. and internationally, and "could fundamentally alter the business model" for Indian IT firms. The Wall Street Journal wrote about the CLSA report and posted it.

Visa rejection rates, reported the CLSA, for top Indian IT firms have reached a high of almost 40% from 5% in just 18 months.

Additionally, Congress last year hiked the H-1B visa fee by $2,000 for firms that are dependent on the visa to deliver their services, which raised visa processing fees from $2,320 to $4,545, reported CLSA.

This is all bad news for India's IT firms, which have as many as 90% of their U.S. workers on visas.

But it's getting worse for India's IT sector. A federal grand probe into Infosys use of the B-1 visitor visa, prompted by a lawsuit by an employee, Jay Palmer, is raising the national profile of the visa issue. B-1 visa workers don't pay U.S. taxes and are considered short-term. Palmer's lawsuit alleges that Infosys used B-1 workers for jobs requiring H-1B workers.

There is a willingness among some in Congress to increase restrictions on the offshore outsourcers. U.S. Rep. Zoe Lofgren's (D-CA) visa reform bill will increase wage rates for H-1B workers and also make difficult for offshore outsourcers to keep a worker on an H-1B visa longer than three years. Offshore firms can now count on six years.

There remains the persistent threat from U.S. Sens. Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill) for a rule that prohibits companies from having more than 50% of their workforce on H-1B and L-1 visas.

The CLSA report, which looked at Infosys, Wipro, HCL Tech and TCS, said tighter visa restrictions may force Indian firms "to hire more locals at a pace faster than they are doing right now."

By locals, CLSA means U.S. workers.

 

Sign up for Computerworld eNewsletters.

Why the top 4 IT priorities in 2018 are faster, smarter, in memory, in cloud

Exclusive: Maintaining Malaysia’s digital transformation trajectory - Part 2

Accenture Malaysia on notching up customer experience in the AI era

Sound cybersecurity strategies in the AI era

Madanjit’s promise: Customers at heart of everything that we do

Security trends 2018: biometric hacking, state-sponsored attacks, daring cyber heists

Dissecting the “Intelligent Enterprise”

Alibaba Cloud Malaysia’s pledge to country’s ICT development

Microsoft shares precious GDPR compliance insights at MDEC, LGMS event

Exclusive: Maintaining Malaysia’s digital transformation trajectory - Part 2

Razer Partners With Ignition Design Labs on Gaming-Grade Wi-Fi

Razer Partners With Ignition Design Labs on Gaming-Grade Wi-Fi

Hidden Figures - A Look at Heroes & Technology

Simulated Cyber Wars Hone Security Skills

Microsoft To Run 30 Hour of Code events in Asia