HYDERABAD: The government of India is encouraging the setting up of more start-ups in India. The talent pool of IT professionals that are retained in the country due to stringent H1B1 visa regulations will help the country build more aggressive start-ups. This will eventually help with innovation and research and development in India, said Ranga Pothula, President, Hyderabad Software Enterprises Association (HYSEA).
The US Consulate in Hyderabad issues the fifth highest number of student visas in the world and the highest in the country. Many of these students go on to work in the IT sector in the US. However, in the short term, Indian IT companies will witness a drop in profit margins, Pothula said.
“The markets have already reacted. The customers of Indian IT companies also will be affected as their profit margins too will come down and they will lose cost advantage,” said Pothula. "The industry will have to look at other options such as cloud computing to adapt. Doing so will even further bring the number of H1B1 visa holders down to 5 per cent, he added.
“Since the rationale for the administration and the legislative wing is to protect job opportunities for Americans, our strong suggestion is that they should carefully calibrate the conditions keeping in mind the skill shortage in the US,” said R Chandrashekhar, President, NASSCOM. Once that is done, they should not leave any loopholes in the rules being framed that leave some channels open for circumventing the limits.
Raising wage levels for dependent companies alone will defeat basic objective as non-dependent companies can continue to bring in skilled workers at lower wage levels, thus nullifying protection of American jobs, Chandrashekhar added.
CP Gurnani, chief executive officer, Tech Mahindra had a more cautious take. “The bill has just been tabled and for it to become a legislation it takes a fairly long time. Let’s wait for the legislation. Everybody has got the right to decide what is right for them. If you see a cloud and assume that is a storm, we have to say best of luck to them,” he said.