Chennai: The US move to suspend work visas like H-1B till year-end may hurt the Indian IT firms slightly, according to credit rating agency ICRA.
It said the temporary suspension will be mildly negative for the Indian IT services sector considering their high dependence on such visas.
“However, the suspension will not affect those already in the US on the visas…Currently, Indian IT services is the major beneficiary of the H-1B visa programme. USCIS issued a total of 3,88,403 H-1B visas during FY2019 (October 2018 to September 2019 period) including fresh and renewals of which share of India stood 71.7 per cent,” it said in its report.
According to a Goldman Sachs Equity Research report, “this proclamation will have negative implications for the Indian IT sector, particularly on margins…(we) believe companies with lower levels of locally hired workers will see a greater negative impact.”
It further said that Indian IT outsourcing companies have been consistently working towards reducing their reliance on H-1B/L1 visas since 2017, and focusing on the locally hired workforce to create more jobs in the US economy.
The report said local hires account for as much as 45-70 per cent of the employees in the US for the top 5 Indian IT service firms, reducing the dependence on H1-B visas.
In its FY20 annual report—TCS had said it has hired 20,000 people in the US in the last five years. Infosys too had committed to hiring 10,000 locals in the US.