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Doubling Of H-1B, L-1 Visa Fees Catastrophic for Indian IT Firms – Rs 26,000 Cr Additional Expenses Estimated

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A crucial bill in US House of Representatives have been passed, which has increased the H-1B and L1 visa fees by 100%. This means that American IT companies will need to pay $4000 for H-1B and $4500 for L1 visa now, if they want to hire an overseas employee to work in US.

Earlier it was $2000 for H-1B and $2250 for L1 visa.

As per various estimates, this doubling of work visa may result in additional expenditures to the tune of $4 billion (Rs 26,000 crore) for Indian firms, which have a presence in US.

This new fees hike is applicable only for those American companies which have more than 50 employees and 50% of these employees are foreigners. Thus, IT biggies such as Wipro, TCS and Infosys would now spend more for bringing in Indian employees into the US.

As per a 2013 report, Cognizant, TCS and Infosys were the companies which received maximum H-1B visa approvals.

Earlier, we had reported that a bill has been proposed which will reduce total H-1B visas offered in US by 15,000; which was touted as another major decision against IT firms.

As of now, US allocates 65,000 H-1B visa every year, which gets filled up within days of the lottery on April 1.

Catastrophic Fee Hike: Burden of Rs 26,000 Crore for IT Firms

After this bill was passed, various estimations have been projected regarding the actual loss which IT firms may incur.

As per R Chandrashekhar, president of industry body Nasscom, annual expenditure incurred by domestic IT firms will now immediately increase from Rs 665 crore to Rs Rs 2660 crore, due to this fees hike. Considering that the new rule will be applicable for 10 years, it means that Indian IT firms will need to additionally spend close to Rs 26,000 crore in visa fees.

Chandrashekhar said, “The new visa fee is applicable not only on visa applications but also on reissuance. The net effect is quadrupling of the impact to $400 million on annual basis. Over a 10 year period, it has a $4 billion impact on the industry,”

Nasscom and IT firms from India has severely objected to this sudden hike in visa fees, as they have claimed that Indian IT firms are getting targeted intentionally by US lawmakers. Chandrashekhar even said, “It does not confirm to the rules of fair play..”

On the other hand, analysts are predicting that operating margin of IT firms will also suffer, as the impact may vary from 15 to 20 basis points.

As per the information available, this increased revenues from visa hike will be used by US Government to “fund continued healthcare for first-responders impacted by the 9/11 terrorist attacks and biometric entry and exit monitoring system.”

US Economy Will Suffer?

If observed strategically, then we will see that this move may further deteriorate US economy. Considering that there is a shortage of skilled workers in US, pressure would be now to outsource the jobs, rather hiring overseas employees.

Hence, overall, jobs will move out of US, outsourcing will further anger the local population and overall, no one wins here.

As per Chandrashekhar, “If a job has to be done and we cannot bring in people and they are not available locally, it will increase the pressure on offshoring… The consequential spinoff that would have accrued to US markets would be lost,”

We will keep you updated as more information comes in regarding this visa hike.

  1. Nutella says

    Indians caused the US deterioration. USA was booming in 1998 before Indians arrived.

  2. Ozbuzz says

    Nice move… Boot licking engineers will suffer and also good ones will suffer. Who says talent is not there, Americans never got an opportunity at first place then how can u hire a 5 year american when he never got an entry and never spent 5 yrs in IT. U gave opportunities to Indians so u can crush and get juice out of them, over worked indians in place of Americans.

    Now you say no talent locally ? No talent locally because u never gave them an entry? Now you are fearing them. TCS infy CTS wipro hcl have at least 10 training centres each compant in India.
    Not a single training centre in usa.

    You will pay Indians well and start growing local american market only when this man transportation from india ends saying “we gave u onsite! so work 15 hrs a day on a 24 hr day” what is left of the day then ? No family no life no hobbies no gym no healthy life style boss!

    Drop dead !
    Now u will think all alternative ways other than growing american market that too won’t work for long.

    There is always one thing in being straight forward. You never fail.

    Like cutting on shoring they have to bring in rules for offs hiring too. Too many people are there who can’t utter a good line in English yet they are in IT and america. Licking boots of their managers. Ask them to clear IELTS band 7 and above to enter IT. And fly america. Hardly more than half is eligible then from india then. Rest will fail.

    Who is calling Americans talent less… When they are called super power by rest if the world.

    One example. U can drink tap water in america at any of the places and stay healthy. Possible in India ?
    What happened to those talents that failed to implement such a system.

    Its all hyphed up.

    1. Nutella says

      Americans created the IT industry. India cannot even build enough toilets.

  3. sathish says

    Oh…this mediocre to poor developers and so called project manager/sr.manager/Poor director designation created out of outsourcing companies are helping US in tax revenues …Ha ha…these cheap guys continuously replacing the highly qualified American workers is due to the greed of the american corporations like JPMC,AMEX,AETNA,CIGNA,UNITEDHEALTHCARE.etc….Endless fraud commited by the Indian companies in Visa fraud,Greencard abuses are irrecoverable…Damage is already done..now US is taking some efforts to reduce the fraud after 15 long years of outsourcing disaster…More strict rules shud be enforced in the near term to curb the lucky growth of Indian companies and enlighten the life of americans..

  4. Nutella says

    India’s days of raping the US econ at will are over. There is no shortage of workers in the USA.

    http://www.indiots.rocks

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