MUMBAI / BENGALURU / KOLKATA: The IT industry’s apex body Nasscom on Tuesday said that the move by the Trump administration in the U.S. to overhaul the H-1B visa and other work visas will prove challenging for the Indian IT sector. The trade body also said that the new executive order will, at the same time, also leave loopholes that will nullify the objective of saving American jobs.
Earlier, there were reports that the U.S. President would sign an executive order that will double the wages of the H-1B visa holders to $130,000, in a bid to prevent recruiters from bringing in low-cost workers into the country. The High-Skilled Integrity and Fairness Act of 2017 introduced by California Congressman Zoe Lofgren in the U.S. House of Representatives is aimed at creating more jobs for the U.S.-based employees.
“It is important to point out that this bill has just been introduced and will need to go through several legislative discussions at the US Congress and Senate before this can become a law,” according to a statement from the IT industry body.
If the Bill becomes law in the U.S., the impact on Indian IT companies would be significant as a majority of H-1B applicants are Indian nationals and work for IT services companies.
“Since the rationale for the Administration and the Legislative wing is to protect job opportunities for Americans, our strong suggestion is that they should carefully calibrate the conditions keeping in mind the skill shortage in the U.S.,” said R. Chandrashekhar, President, Nasscom.
Recently the IT trade body had said that it would take a delegation to the U.S. in February in an attempt to reach out to the new administration.
On Tuesday, the Indian government also said it was in touch with the U.S. administration regarding new visa norms. India had been in touch with the United States on the upcoming H1B visa law, the Ministry of External Affairs said on Tuesday indicating that the outreach did not have the desired result.
“India’s interests and concerns have been conveyed both to the U.S. administration and the U.S. Congress at senior levels,” said Vikas Swarup, Ministry of External Affairs, Spokesperson. Foreign Secretary S. Jaishankar had met officials of the Donald Trump administration in November.
IT stocks battered
Meanwhile, the shares of all the IT majors plunged on Tuesday following reports the media reports. The BSE Information Technology index was the worst hit among all sectoral indices on Tuesday. It lost 292.54 points or 2.96%. The benchmark Sensex was down 193.60 points or 0.70% to close at 27,655.96.
Sector heavyweight TCS lost 4.47% or ₹104.30 to close at ₹2,229.90 while Tech Mahindra and HCL Technologies shed 4.23% and 3.67%, respectively. Infosys lost 2.01% to close at ₹929.30. Wipro also fell 1.62% to ₹457.10.
Even IT training solutions provider like Aptech also bore the brunt of the overall negative sentiment towards the software sector. While Aptech lost 2.23% to close at ₹183.95, NIIT fell 3.44% to ₹409.70.
Incidentally, the BSE Teck index that comprises telecom stocks along with technology majors was the second-worst performer of the day declining 2.49% to 5,338.08.
The higher wage level would have ripple effects for many other industries including nursing, engineering, life sciences, and others.
“We believe with the prevailing protectionist sentiment and newly imposed restrictions, the US business ecosystem will see a sharp rise in on-shoring and near-shoring arrangements,” wrote Sanchit Gogia, chief executive of Greyhound Research in a note.
