The proposed $103,265 additional fee on H-1B visa petitions could accelerate the shift of technology work from the US to India-based Global Capability Centres (GCCs), as companies look for ways to access Indian talent without moving workers to the US, economist and former UN advisor Santosh Mehrotra said in an exclusive conversation with ANI.
India's IT sector is booming. Photos by KT file
The US Department of Homeland Security (DHS) has proposed an additional fee for H-1B petitions subject to the annual cap, including those eligible for the advanced degree exemption.
The fee would be paid at the time of filing and would come on top of other applicable charges. DHS estimates that the proposal could generate around $8.8 billion annually, based on 85,000 H-1B cap-subject petitions. Meanwhile, on Tuesday, US has also paused visa appointments for applicants worldwide.
Mehrotra said the impact would depend largely on whether companies are willing to bear the additional cost or try to pass it on to workers.
"It's a bit going to make life difficult for Indians, but it's going to make life difficult for everyone. But of course Indians are the biggest number of H-1Bs. So it's going to have a dampening effect for Indians wanting to, or companies wanting to send Indians," he said.
Economist and former UN advisor Santosh Mehrotra. Photos by ANI
However, he pointed out that the impact would extend beyond Indian workers and IT companies, as a large share of H-1B hiring is done by US-based companies.
"The majority of H-1B-hirers, or companies that hire H-1Bs, are US companies. The only Indian company is actually PCS or Tata Consultancy Services. They are the only ones who have large numbers of H1Bs. The other large companies that hire H1Bs are all US-based companies in the US. So they are going to be impacted badly," Mehrotra said.
The economist said that the demand for Indian tech workers in the US and demand for software exporters from India are declining as more American companies establish GCCs in India.
"Most American companies are coming to India to set up global capability centres. So services that IT companies were earlier providing from here are actually being insourced by the big companies internationally and especially the US when they locate their global capability centres in Hyderabad or in Chennai or in Bengaluru and the greater national capital area," he said.
Mehrotra said this could mean that some technology work which previously required Indian professionals to travel to or work in the US could increasingly be carried out from India.
For Indian technology professionals looking for international opportunities, Mehrotra said this could increase the need to explore markets beyond the US, including Southeast Asia, the Middle East and Europe.
The H-1B programme allows US companies to employ foreign workers in specialised, high-skilled occupations and has traditionally played a significant role in the technology sector.
The annual statutory limit for new H-1B visas is 85,000, comprising 65,000 regular-cap visas and 20,000 visas for applicants holding a master's degree or higher from a US institution of higher education under the advanced-degree exemption.
Of the 65,000 regular-cap visas, 6,800 are reserved for nationals of Chile and Singapore.
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