New US H-1B Visa rule to hit Indian IT sector hard; NASSCOM warns of job impact

Indian IT companies have a large market in the United States, where they send thousands of employees through H-1B visas. This new rule will increase their costs exponentially, making it difficult to compete with American companies.

New Delhi: The United States has drastically increased H-1B visa fees, creating a significant crisis for Indian IT companies. The White House has decided to increase the application fee to $100,000 annually, effective September 21st. This decision will not only impact the competitiveness of the Indian IT industry but will also severely impact employment. NASSCOM has expressed concern, stating that implementing it in such a short timeframe will increase uncertainty for companies and professionals.

Impact of H-1B Visa Fee Hike

Indian IT companies have a large market in the United States, where they send thousands of employees through H-1B visas. This new rule will increase their costs exponentially, making it difficult to compete with American companies. NASSCOM has stated that this will negatively impact onshore projects and business continuity. Companies will be forced to make changes to their operations, and some projects may even be halted.

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Promoting Local Employment

NASSCOM also stated that over the past few years, Indian companies have been reducing their reliance on H-1B visas and are striving to increase local employment. They are paying taxes in accordance with US regulations and creating jobs locally. However, such a significant fee increase could slow this process and increase challenges for companies.

Debate on Innovation and Security

H-1B visa holders are a vital part of America's innovation and technology ecosystem. NASSCOM stated that these professionals should not be viewed as a national security threat. Rather, this talent strengthens America's technology leadership. NASSCOM will continue to engage with industry and the government on this issue and seek a transition period so that companies and employees can prepare in time.

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Double Pressure on the IT Sector

India's $283 billion IT sector is already grappling with numerous challenges. Delays in client decisions, geopolitical tensions, and the growing influence of AI have destabilized the industry. Now, the increase in H-1B visa fees has further increased concerns. Additionally, the HIRE Act, introduced by US Senator Bernie Moreno, is also a red flag, imposing a 25% tax on foreign workers. This could limit outsourcing and further hamper Indian companies.

These are challenging times for the Indian IT industry, and it is essential that the government and industry work together to address this situation to protect both jobs and businesses.