US Visa Cutbacks a Blow to Indian IT Industry

By T.C. Malhotra | July 7, 2008 | 8:13 PM EDT

New Delhi ( - India's information technology (IT) industry is bracing for the possibility that the U.S. may drastically reduce the number of special visas issued each year to enable skilled foreigners to work in the country.

By year's end, the number of H1-B visas is expected to drop from the current limit of 195,000 a year to 65,000.

Indian professionals have up to now filled about 64,000 of the 195,000 visa slots, so the planned cutback will hit the Indian industry harder than others, according to Sunil Mehta, vice-president of the National Association of Software and Service Companies (NASSCOM).

NASSCOM, the umbrella organization for IT software and service firms in India, is preparing to lobby U.S. lawmakers in a bid to avert the move. It also expects to get strong support from U.S.-based software firms, which need Indian specialists.

Several years back, Indian software professionals were the first choice for many American and European companies. There are hundreds of Indian firms in Silicon Valley alone.

Under the H1-B visa program, foreign workers with special skills are allowed to work in the United States for three years. The non-immigrant visa may be renewed once, so holders often end up staying for the maximum six years.

Ajay Dhawan, an IT specialist at InfoSys Technologies, said the advantage of the non-immigrant visa was that applications were generally much more quickly approved than they were for a Green Card.

The company wanting to employ the personnel, not the individuals themselves, makes applications, he explained. To be eligible, the applying firm has to have a Federal Employer Identification Number.

The number of H1-Bs issued each year rose to 195,000 during the IT boom, when demand for skilled personnel was high.

Now, however, the technology downturn, coupled with a slow recovery in the U.S. economy and the continuing fallout from the Sept. 11, 2001, terror attacks, are being blamed for the move to cut back on the visa numbers.

Aakash Mehra, chief executive officer of New Delhi's STG software company, said Wednesday that the industry slowdown had already affected the Indian IT industry, but this new step would "send shock waves" through the sector.

Vanket Sundram of Satyam Computer Services acknowledged that a cutback in the number of H1-B visas would further reduce the chances of Indian software professionals seeking careers in the U.S.

But he noted that many U.S.-based software firms had already shifted business offshore to India to cut costs.

Sundram said he did not expect the move to have an adverse effect on Indo-U.S. relations.

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