NEW DELHI – IT giants are forced to contract out work than ever before in the U.S. as it has made it difficult and costlier for the Indian software professionals to travel on work in the United States, reports The Economic Times.
IT professionals in various IT companies have been denied visas and U.S. assignments due to higher costs and lower margins, further eroding their competitive advantage in a weak demand environment. As a result, these companies are forced to subcontract work to temporary consultants resulting in a large number of their engineers sitting idle without work.
The U.S. accounts for more than 70 billion dollars in software exports from India. The U.S. had made it difficult for the Indian companies to obtain visas to send their employees to work on projects assigned at the client locations. Under the regime of President Obama, visa fees have increased and so have the rejection rates of these visas.
The approval of L1 visas has been very less. In 2011, approval for L1 visas were 28 percent lower, according to the National Foundation of American Policy. Visas approval on the other hand rose to 15 percent of applicants from other countries. More than 25,000 of Indians travel to U.S. every year for work purpose and the work permit is usually under the L1 visa category. In India, some software professionals see this as a discrimination against them.
Software industry grouping Nasscom said that it is working with the Indian and the U.S. authorities regarding the rising rejection of visas. “While some part of the work gets contracted, some IT firms are now focusing on hiring locals for domain-specific work in the U.S.,” said Ameet Nivsarkar, vice-president of Nasscom to The Economic Times.
In mid-2010, when the U.S. had increased the fees for visas, Nasscom had estimated an additional cost burden on the IT companies in India to 250 million dollars.
