US H-1 B VISA PROPOSALS—GOOD OR BAD FOR INDIAN IT FIRMS

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But a point worth notable is that such proposals might be beneficial for Indian IT firms. How? Let’s see this in detail here.

Indian IT firms worried about US H-1B visa proposals—Latest US H-1B visa proposals are making Indian IT firms a worried lot. Why? Because Indian IT firms think they will, no longer, stay competitive in the global market.

Moreover, they will have to face the axe of higher costs while limiting their profit margins. That’s not all. Such US H-1B visa norms would also threaten to trigger a war between the US and India.

Latest proposals for US H-1B visas could prove to be a blessing for Indian IT firms.

US H-1B visa proposals to increase visa costs—US H-1B visa costs will go up by nearly three to five times the present costs. So, what this simply means is that Indian IT firms wanting to get US H-1B visas for their employees will have to shell out more as a result of new US H-1B visa rules.

Consider, for example, the current cost of getting a US H-1B visa.

It is $2,500(US Dollars) for getting a US H-1B visa for any employee wanting to go to the US and work there on US H-1B visa.

And Indian IT firms would have to offer higher pay to US H-1B visa workers. Moreover, they will be required to hire not less than one local worker for each holder of US H-1B visa. All this would lead to increased costs in terms of pay bills.

So, this will have a direct affect on the productivity of the firms and bring down the profits considerably (a rough estimate shows reduction in profit margins by nearly 1.85 percent in the period of five years along with another reduction of 2 percent due to onsite utilization rate—this sums up to around 4 percent reduction in five years period).

Increased off-shoring?—Do the latest US H-1B visa proposals mean increased rate of off-shoring? If yes, then how? Well, lets find out the truth behind this. It is being believed that latest US H-1B visa proposals may(unintentionally) lead to increased off-shoring.

How?

That would be due to the fact that increased costs of US H-1B visas along with hiring of local talent will lead to increased expenditure on onsite work. And this, in turn, will mean less onsite work for IT firms as well as their clientele.