H-1B visa row: IT industry hopeful of a solution

The Indian IT industry is watching U.S. Secretary of State Hillary Clinton’s India visit very closely hoping that the US will loosen the tight grip on its visa regulations. A recent CLSA report said that H-1B/L1 visa rejection rates have doubled to eight per cent for larger companies, and it is much higher in case of smaller companies. The H category visas are temporary workers’ visa, which allows US employers to temporarily employ foreign workers in specialty occupations. The US government has put a cap of 65,000 for H1-B visas. “I also took the opportunity to convey to Ms Clinton the woes of our IT companies in sending their IT professionals to execute projects and conduct business in the US,” said external affairs minister SM Krishna. Krishna is making the right noises in a bid to calm down the growing concern within the IT industry that the government is not doing enough to resolve the visa crisis in the US. So, even as Krishna met Hillary Clinton and raised the issue, the industry is hoping that some pressure would be eased on work visa regulations. And the fears are not unfounded especially after the US government increased H1B visa costs by a steep 2000 dollars last year to officially fund their internal border security program. In 2001 at the peak of the dotcom boom, the H1B visa cap was at 195,000 but with the economic slowdown from 2007, the cap was brought down to 65,000. The demand for H1B visas has been on the steady decline, the 65000 H1B cap which used to get filled in a few days in the first two years, now takes more than six months. The fiscal 2011-2012 visa cap was reached only in January 2011 eight months after it opened. For 2012, the figure so far is currently at only at 8000 and analyst says higher visa costs might be a deterrent. In 2010, Infosys was the top applicant for H-1Bs at 3,792 applications followed by Cognizant, Wipro and Microsoft. But analysts see this only a short-term challenge for Indian IT companies but say they will need to continue to hire more locals. “This won't last forever. We are going to need that influx of talent coming in. What this means for I.T services in the short run is much more investment involving lobbying, much more investment in figuring out how to get folks in and rotate it through but I don't think it will have meaningful impact at least not over a 3-year time span,” said Ellen Daley, VP and practice leader at Forrester Research. In addition to the larger visa regulation issue, the individual case of visa misuse allegations against Infosys is also being closely monitored by both governments as any verdict against the company could have major fallout. With companies indicating that client onsite work is increasing, H1B visas are likely to be back in the spotlight this year and the US government will urgently need to look at immigration reforms. 19 July 2011    P S Balakrishnan For more news and updates, assistance with your visa needs or for a Free Assessment of your profile for Immigration or Work Visa’s just visit www.y-axis.com