H1B visas: Indian IT firms adjust strategy ahead of proposed changes

With the H1B visa application process kicking off next month, Indin IT companies are preparing to face tougher new rules


US President Donald Trump. While the White House has drafted an executive order that envisages changes to the way the H1B programme is administered, none have come into effect so far. Photo: Reuters
US President Donald Trump. While the White House has drafted an executive order that envisages changes to the way the H1B programme is administered, none have come into effect so far. Photo: Reuters

Bangalore: India’s technology outsourcing giants, unnerved by the administration of President Donald Trump, are changing their strategy on US work visas even before new policies are implemented.

While the White House has drafted an executive order that envisages changes to the way the H1B programme is administered, none have come into effect so far. With the application process kicking off next month, companies are preparing to face tougher new rules as they seek some of the 85,000 work permits allocated.

“The key thing is that we will stop applying for H1B visas for employees with lower levels of experience,” Krishnakumar Natarajan, executive chairman of IT services company Mindtree Ltd., told Bloomberg News. “Additionally, we will reduce the numbers of visa applications as a whole and I expect overall industry numbers to fall.”

Also Read | Five charts that can help understand the H1B visa debate

The US is the most important market for India’s $110-billion IT services export industry, with companies changing their strategy even as they aggressively ramp up operations and set up development centers.“We are going local and building recruitment to reduce dependencies on H1B visas,” said Bangalore-based Natarajan, a former chairman of industry body Nasscom.

Until now, IT companies typically applied for multiples of the visas they expect to need because the system operates as a lottery. C.P. Gurnani, chief executive officer of Tech Mahindra Ltd., expects higher billing rates for customers as salaries for H1B visa holders will probably rise, with the costs passed on to clients.“Tech Mahindra will apply for visas proportionate to our business needs,” said Gurnani, whose company is India’s fifth largest outsourcing company

The top companies, which account for 90% of the H1B visas that Indian outsourcers get, are keenly matching skill requirements to applications, said Shivendra Singh, vice president and head of global trade development at Nasscom. “IT services providers are doing skillset mapping,” said Singh, providing further indication that the visa applications will be much more targeted.

Singh said Indian IT outsourcers operate in more than 80 countries and have provided services in the US for decades. “We are fine with any moves to adjudicate and investigate H1B visas as long as there is no undue harassment of Indian companies over others doing the same thing,” he said. Bloomberg

More From Livemint