Shares of Indian IT companies crashed today in one harsh hour, blotting out over Rs. 50,000 crore in the market value of top companies, after US House of Representatives was introduced with the bill calling for more than doubling the minimum salary of H-1B visa holders to $130,000 from the current $60,000. Indian IT companies will find it difficult to hire employees on H-1B visas to work on projects in the US due to a sharp rise in minimum salary.
Benchmark of IT stocks, BSE IT index fell over four per cent. Shares of outsourcing giant TCS fell 5.6 per cent, HCL Tech 6.3 per cent ,Tech Mahindra 9.7 per cent, Wipro 4.23 per cent and Infosys 4.6 per cent.
Indian Companies have been hiring more US citizens but employing more US citizens will raise the cost for Indian outsourcers and thus affecting their margins and overall profit.
Indian IT companies will remarkably cut down on sending employees on these work visas to the US in this situation as accorded by AK Prabhakar, head of research at IDBI Capital Markets & Securities. The senior most people will be sent peculiarly. He also added that with most of the projects now on digital or cloud platforms, the need to send employees on H-1B visas will also go down.
California Congressman Zoe Lofgren in the US Congress introduced the High-Skilled Integrity and Fairness Act of 2017 which proposes to remove the 'per country' cap for employment based immigrant visas to make sure all workers are treated more fairly. The legislation keeps aside 20 per cent of the annually allocated H-1B visas for small or start-up employers (50 or fewer employers) to make sure that small businesses also have an opportunity to compete for high-skilled workers.
The H-1B visa (non-immigrant visa) allows US companies to employ foreign workers in speciality occupations which require theoretical or technical expertise in specialised fields.