Raising concern over the H-1B visa issue, the industry body, Associated Chambers of Commerce and Industry of India (Assocham) in its latest report has said that tightening H-1B visa regime in the United States will force IT giants to create fundamental changes to their strategies in terms of hiring, salaries and jobs, which could impact employees in India too. It further stated that as the cost pressure would increase, aggravated by rising rupee leading to lower realizations, Indian IT companies may be forced to displace workforce and added that in that case, the chances of layoffs are real.
As per the Assocham report, nearly 86% of the H-1B visas issued for workers in the computer space go to Indians and this figure is now sure to be scaled down to about 60% or even less. Cautioning against a huge decline in remittances from US, Assocham said that the US move could disturb remittances by 8-10 percent. As per the World Bank data the US was the second largest source of remittance for India in 2015, behind Saudi Arabia, and about $10.96 billion, nearly 16% of the total inflows, were sent to India.
The industry body further said that with Britain already hiking the minimum wage requirement to euro 35,000 for tier II visa immigrants, this latest move by the US will act as a definitive dampener to the Indian outsourcing industry. As per its report, the alternate solutions for the Indian outsourcing industry are investing near shore centres - facilities close to the US, focus on local hiring in America, and to work virtually, which is becoming easier with the wider adoption of cloud services and greater digitisation.
