H-1B Visa Allocation to Top 5 Indian IT Firms Drops by 49%, US Restrictions Compel Tech Companies to Hire More Locals
Restrictions on the H1-B visas by the US have compelled Indian tech companies to hire more locally and led to an escalation in employee costs.
Mumbai, April 5: The allocation of H-1B work visas to India’s top five Information Technology companies have declined by a whopping 49 per cent in 2018, after the rules were tightened by the United States. According to a report by Care Ratings, the total number of H1-B applications approved by major It firms- TCS, Infosys, HCL Tech Mahindra and Wipro stood at 22,429 down from 43,957 in 2017.
Out of these, 72 per cent were with Bachelors degree and rest 28 percent with a Masters degree. The median salaries of these companies, for H1-B workers, were in the range of USD 74,000-90,000. New H-1B Visa Filing Rule to Give Priority to Workers with Advanced Degrees from US.
Limitations on the H1-B visas by the US have compelled Indian tech companies to hire more locals and led to an escalation in employee costs. Second largest exporter Infosys led with 2,122 visa denials in the fiscal year 2017-18, followed by TCS with 1,896 rejections, the report by Care Ratings said.
Out of the top three companies with highest H-1B visa denials in FY18, Cognizant was leading with 32 percent denials followed by two Indian IT majors Infosys and TCS with 26 percent and 18 percent. It can be noted that the US-headquartered Cognizant has a large pool of employees working out of India comparable with any Indian tech major. H1B Visa Blacklisted Firms: List of 26 Companies Named as Willful Violators by US Department of Labour.
The cost structures for the Indian IT majors have been impacted as a result of the US policies, the agency said. It can be recalled that while every major Indian company has pointed out to a surge in local hires in the US, while sub-contracting work in geographies like the US has also put a drain on profitability for some.
However, after the installation of the Trump administration, which has been vigilant on ensuring American interests, there has been a faster fall. The approvals declined by a sharp 50 percent in FY18 to 22,429 from the 43,957 in the year-ago period, it said.
Meanwhile, the United States, earlier this year, had announced a new H-1B visa filing rule from April 2019 under which advantage would be given to foreign workers with high-level degrees from American universities. This decision would impact workers who have done their higher studies from India and China.
(With PTI Inputs)
(The above story first appeared on LatestLY on Apr 06, 2019 10:45 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).