New H1-B visa rule change to impact hiring of Indians in IT companies

A recent policy change favouring advanced degree holders for visas in US will lead to a hit on IT companies’ profitability as the number of H1-B visas approved gets reduced, a report said.

In December 2018, the United States Citizenship and Immigration Services (USCIS) proposed reversing the process for H1-B selection favouring advance degree holders.

This is likely to lead to 10 per cent reduction in H1-B visa approvals for regular applicants, where the applicant is without an advance degree masters or higher from US universities, ratings agency Icra said.

Increased onshore hiring associated with higher wage bill along with factors such as pricing pressure on commoditised services, wage inflation and lower revenue growth will negatively impact the margins going forward, it said.

Even though the companies have other factors to restrict the impact, overall operating margins are still expected to decline from 22.1 per cent in FY18 to 20.8 per cent in FY21, it said.