The stimulus package being considered by the US Senate has inserted a condition on companies which will be receiving aid from the stimulus package. Such companies will not be able to use H-1B visa to hire foreign employees if they had laid-off US citizen employees in the last six months.
Many analysts have raised apprehensions in this regard that the move will impact India’s IT industry and IT professionals working in US as most of them rely on H-1B visas for their stay. However, looking into the matter in detail, one feels that such apprehensions are misplaced and the actual impact may be minimal.
Firstly, total number of H-1B visas is only 65,000 and Indian IT industry only gets around one-third of this. Thus, the number is not large considering the strength of Indian industry. Secondly, the companies which will be impacted by the decision will be only handful that actually take help from the stimulus package. Thus, the proportion of IT demand that H-1B holders will not be able to work for will be only a small proportion of total IT consumption in US.
Finally, most of the large Indian IT companies have their presence in the US through onshore delivery centres. Such companies can therefore utilise L1 visa which stil remains available. There may be some impact on individuals working in US companies or those Indian vendors which lack US presence and are working for US companies through clients end deployment using H-1B visa. However, the number, as discussed above, should be very small.
In fact, the move may also work in benefit of the Indian industry in a way. The troubled US companies will have problem to manage their IT work, as they will be forced to lay-off H-1B IT population, which may be their direct employment. The work being done by such workers will logically be outsourced, and most of that to Indian companies. Overall we may conclude that, a priori, the move does not pose any significant threat to Indian industry and may only turn out to be a blessing in disguise.