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New H-1B visa rules: Indian IT companies may have to pay 50% more

According to a transcript on the White House website, Tata Consultancy Services, Infosys and Cognizant are the top recipients of the H-1B visa.

business Updated: Apr 25, 2017 16:12 IST
Sunny Sen
U.S. President Donald Trump looks up while hosting a House and Senate leadership lunch at the White House in Washington
U.S. President Donald Trump looks up while hosting a House and Senate leadership lunch at the White House in Washington(REUTERS)

One thing is for sure, American president Donald Trump doesn’t want to save jobs of Indians working in the US. With a new executive order in place, Indian IT companies will have to hire more Americans and transfer fewer from India, putting an end to the age old business practice of technology companies to save cost.

Trump made his stand clear at his inaugural speech, after winning the presidential elections. “I will fight for you with every breath in my body, and I will never, ever let you down,” the 45th president of the US, said in January.

He promised that “America will start winning again,” like never before. “We will bring back our jobs. We will bring back our borders. We will bring back our wealth. And we will bring back our dreams,” Trump said, in one of his most decisive speeches -- the inaugural one -- that marked a complete U-turn of America’s foreign policies, and its relationship with other nations.

Soon after, the White House has taken some aggressive action on H-1B visa holders with its new visa policy to impose a crack down on immigrants who are taking away local jobs.

“It’s the only program -- well, the only program that was mentioned by name is the H1B visa. But the departments and agencies are asked to crack down on fraud and abuse generally in our immigration system,” a senior administration official of the White House said on April 17 at a press briefing.

An executive order was passed a day after the Easter, called “Buy American and Hire American”. At the briefing by the senior administration official, at the James S. Brady Press briefing room at the White House at 4:07 in the evening, Amercian time, Indian companies were accused of unfairly taking away

Indian IT companies -- Tata Consultancy Services, Infosys and Cognizant -- according to a transcript on the White House website said are the top recipients of the H-1B visa. “They apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas,” the transcript mentioned.

This helps these companies corner the largest percentage of immigrant visas.

That would not have been a problem, if it was fair wage, according to Trump. Indian IT companies pay an average of $60,000 to $65,000, while that of average is about $1,50,000.

So that leaves TCS, Infosys and Congizant -- the Indian IT industry gets about 65% of its revenue from the US -- to hire more staff in the US. That will increase cost of the onsite operations by roughly 40% to 50%.

Over years, Indian IT companies have grown on the back of setting up offices in the US, taking cheap labour from India, at almost half the cost and providing IT services to the US clients.

That gave rise of Indians wanting to study engineering, and aspiring to go to abroad to work. All that is changing, with Trump’s “American First” stand.