The IT and IT-enabled services sector is keeping its fingers crossed over the impact of visa curbs imposed and new ones proposed by the United States on the Indian IT firms in the name of Comprehensive Immigration Reform.
US restrictions will make it difficult for Indian professionals to take up onsite work on the projects as travel to the US will become harder.
Moreover, the use of staffing firms instead of their own employees for US assignments is resulting in higher costs and lower margins, eroding their competitive advantage.
More and more firms are forced to opt for sub-contracting works to temporary consultants when their own IT professionals are sitting idle. The State, for the first time, registered an IT turnover of Rs. 53,246 crore, crossing the magic figure of Rs. 50,000 crore last year.
Of this, exports contributed 76 per cent (Rs. 40,646 crore) and the balance 24 per cent (Rs. 12,600 crore) came from the domestic market, with industry growth on a par with the national average. The industry is currently providing direct employment to close to 3.18 lakh people and another 10.12 lakh are indirectly dependent on the sector.
The export volume of the State constitutes 12 per cent of the total software exports from the country, making it the fourth largest in terms of volume.
The IT industry has represented to the Centre the troubles it was facing as a result of the steep visa fee hike, instances of visa rejections, delays and excessive requests for evidence during application scrutiny.
“We are examining the representation and will take it up at an appropriate level with the US Government. The curbs come as a setback to the industry here,” was how Secretary, Department of Electronics and IT, J. Satyanarayana, reacted when contacted by The Hindu.
As part of the proposed restrictions, companies with more than 75 per cent workforce comprising H-1B visa holders would be banned from bringing in any additional workers and a new fee has been proposed for those that get 30 per cent or more of H-1B visa holders.
This calls for readjustment in major firms.
“There is an increase in the number of visas in absolute terms on the plus side. But there is a little problem for bigger companies as they will have to opt for readjustment of their plans,” Mr. Satyanarayana said.
IT and ITES Services Association of Andhra Pradesh president V. Rajanna was confident that the exports from the State will maintain at least the present level, if not show any major increase. “We can maintain performance on par with the national level in spite of the curbs,” he said.
The ITSAP, he said, was pushing the concerned including the Government and the Software Technology Parks of Hyderabad to come up with results so that a clear picture on the impact could emerge.