60% of the H1-B work visas issued annually by US are grabbed by Indians; as a result, H1-B visa holders contribute $1 billion to the US Govt. every year. Besides, Indian IT industry creates around 4 lakh direct and indirect jobs in US, which generates $5 billion of tax revenues for them.
But it seems, these stats are mere numbers, when it comes to the ‘protectionism’ concept of the most powerful nation of the world.
Two US lawmakers have reintroduced a bill in the US Congress, which will make issuing H1-B visa even more difficult, and have introduced clauses in that bill which will almost decimate the advantages of such work visas.
Named as ‘The Protect and Grow American Jobs Act Bill’, which has been put forward by US lawmakers Darrell Issa and Scott Peters in the US Congress, the very purpose of this bill is clear: stop immigrants from coming to US, and stop them from stealing US jobs.
And the result has been catastrophic as of now: Top 4 Indian IT firms have collectively lost Rs 22,000 crore in market capital in one single day.
Issa said, “In order for America to lead again, we need to ensure we can retain the world’s best and brightest talent. At the same time, we also need to make sure programmes are not abused to allow companies to outsource and hire cheap foreign labour from abroad to replace American workers,”
If we closely observe this quote, then we will find strong traces of Donald Trump’s election speeches and promises in the tone and wording. And Indian IT industry is worried now, because this bill can be passed as well.
‘The Protect and Grow American Jobs Act Bill’: Why It Is Dangerous For India
Besides inclusion of several strong pointers, two legislations stand out:
- The bill proposes to increase minimum salary of H1-B visa holder to $100,000 per year, which is way more than what an American would get for the same type of job. As per the logic presented by the lawmakers, this will prevent abuse of H1-B visa, and allow the companies to hire only the genuine workers, who are actually needed, thereby eliminating all other ‘fake recruitments’. If this is allowed, then the very purpose of issuing H1-B visa would end, and IT companies in India would need to hire Americans for the job. Right now, $60,000 is the minimum salary for an H1-B visa holder.
- The other strong suggestion is making Masters a mandatory requirement for receiving H1-B visa. This single step will end the American dream of thousands of immigrants who are right now working in US, and also filter out several thousands who apply for this visa. Another disastrous step for Indian IT industry.
IT Industry Trembles; Rs 22,000 Crore Wiped Out in Market Cap
Yesterday, when the stock market closed, top 4 Indian IT firms had lost Rs 22,000 crore collectively as the market reacted strongly to the H1-B visa woes.
The IT sub-index on the BSE lost 3%, as shares of HCL fell by 3.5%, Wipro by 2%, Infosys shares fell by 2.5% and TCS fell by 2% in a single day of trading.
As per experts, if this bill is passed by the US Congress, then the EBITDA margin of top IT firms can decline by 150 basis points in the coming days. The market is already witnessing large scale selling by investors, as the future looks bleak for the IT companies.