H1B Visa Fees: The huge increase in H-1B visa fee recently proposed by US President Donald Trump has increased the concern of the global IT sector, especially Indian IT companies. Under this decision, it has been proposed to increase the annual fee for H-1B visa to $ 1,00,000 for foreign skilled workers, which is considered to be the strictest step so far. According to experts and Bloomberg reports, its biggest impact will be on those companies that deploy Indian professionals on a large scale in the US, such as Tata Consultancy Services (TCS), Infosys and Cognizant Technology Solutions. These companies operate on an international staffing model and rely heavily on H-1B visas to provide on-site technology services to US clients.
The H-1B visa program has been a major means of bringing highly educated and skilled foreign workers to the US, especially in the IT and technology sectors. Through this visa, companies hire experts like software engineers, data scientists, system analysts in America.
Why H1B visa holders get hit?
However, there has been a long-running debate in the US that some companies use this program to hire low-cost foreign workers in place of local American workers. Based on this logic, the Trump administration had earlier also tightened the visa rules and now the proposed heavy fees are considered to be an extension of the same policy, so that the foreign workforce can be discouraged and jobs can be given priority to American citizens.
According to Bloomberg analysis, between May 2000 and May 2024, about 90 percent of H-1B visa applications of TCS, Infosys and Cognizant have been approved by US consulates, which shows how deep the presence of these companies is in the US market. If the new fees are implemented, Infosys may have to spend a huge amount of $ 1,00,000 per person for about 10,400 employees.
Why the blow to TCS-Infosys?
TCS will have to pay this additional fee for about 6,500 employees, out of which about 82 percent will be newly appointed employees. In the case of Cognizant too, it will affect about 5,600 employees, which includes about 89 percent of the newly hired staff. This will put major pressure on the cost structure of these companies and their profit margins may be affected.
Overall, if this increase in H-1B visa fees is implemented, Indian IT companies may have to rethink their business models. They will either be forced to increase local hiring in America, or will further strengthen the offshore delivery model, in which work should be done from India or other countries. Along with this, this step can also impact the technology and talent flow between India and America, because Indian IT professionals have been an important part of the American tech ecosystem for decades.
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