According to a new research released on Tuesday, Indian IT companies are anticipated to modify their plans in response to the recent, steep increase in H-1B visa fees that the US administration announced.
An executive order signed by US President Donald Trump on September 19 increased the fee for new H-1B visa applications from the current rate of approximately $1,500 to $100,000.
Indian IT companies, who have historically depended on the visa program to bring qualified professionals to the US, are expected to be impacted by the change.
However, according to Nuvama’s analysis, the total effect on Indian IT companies might not be significant because, over the last eight years, the industry has already lessened its reliance on H-1B visas.
According to the research, “this change has given companies a head start in cushioning the effects of the latest policy change.”
Businesses are anticipated to address the increased expenses by employing more local people in the US and implementing strategies like nearshoring and offshore, according to Nuvama. Even while there will inevitably be some short-term operational and financial difficulties, more offshore is anticipated to reduce the strain over time.
The majority of Indian IT services companies might decide not to pay the increased cost at all, according to the report, since it renders H-1B visas unfeasible.
The agreement would not be financially feasible if an additional $100,000 fee were added, given the median compensation for Indian IT workers on H-1B visas is between $80,000 and $120,000.
Instead, businesses are likely to consider other choices including recruiting locally in the US, developing nearshore operations in nations like Canada and Latin America that share the same time zone as the US, or renegotiating contracts with clients to split costs.
According to the report, a greater emphasis on offshore to India or other economically viable areas is also anticipated.
The research went on to say that although the industry may see short-term volatility, things will probably settle down as IT companies adjust to the new climate and find more effective ways to conduct business.
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