H1B visa fee hike will have less than 0.3% impact on margins: Infosys

Updated - November 17, 2021 03:15 am IST

Published - January 14, 2016 01:14 pm IST - Bengaluru

IT major Infosys on Thursday said the recent H1B visa fee hike by the U.S. is likely to have less than 0.3 per cent impact on its margins.

The Bengaluru-based company is also working on utilising other levers, like increasing onsite recruitment, to mitigate the situation.

“Initial estimate of potential impact for us because of increased visa costs was about 0.3 per cent impact on the margins. But over the last couple of days, we have got clarification that the increased costs apply on new visas and not for amendments and transfers,” Infosys president and COO U.B. Pravin Rao said.

So, the impact will be much lower, he added.

The company’s operating profit margins were at 24.8 per cent at the end of the December 2015 quarter.

Stating that visa fees were a “cost of doing business”, Mr. Rao said he expects similar kind of measures across geographies in the short term.

“In the longer term, we have to look at how to diversify our resource base, how to increase recruitment onsite, how to have a much more global workforce; those are some of the things we are working on over the next 2-3 years to mitigate this risk,” he added.

The U.S., under the 9/11 Health and Compensation Act, has imposed a special fee of $4,000 on certain categories of H1B visas and $4,500 on L1 visas.

Almost all Indian IT companies will have to pay between $8,000 and $10,000 per H1B visa from April 1, when the next annual visa filing session starts.

According to Indian IT body Nasscom, this is expected to have an impact of about $400 million annually on India’s technology sector.

Infosys’ larger rival, Tata Consultancy Services (TCS) has said the fee hike was not a big concern and that it is more of a cost issue than a revenue issue.

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