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May 17, 2013 01:46 PM IST | Source: CNBC-TV18

US Immigration Bill talks threaten Indian IT biz

CNBC-TV18's Shreya Roy reports that the amendments on the Immigration Bill in US Senate may adversely affect the Indian IT sector.

Global headwinds continue to rock Indian IT. The new US Immigration Bill is the latest to whip up a storm. The Bill, which proposes drastic changes to the H1 B visa regime, is undergoing the first round of amendments in the Senate and the stricter hiring proposals have been left unotuched . And if this version of the Bill becomes law, top Indian IT companies like Infosys say this will be bad for business, reports CNBC-TV18's Shreya Roy.

This week, the far-reaching US Immigration Reform Bill is taking a step closer to being made into law. But here's why this could be bad news for Indian IT —considering the Bill proposes sweeping changes to H1B-visa policies and promotes domestic hiring, it could if enacted, significantly impact the operations of Indian IT companies in the US.

Recently, Infosys, which has 10,800 employees working on H1 B visas, said in its SEC filing, “If the proposed provisions are signed into law, our cost of doing business in the United States would increase and that may discourage customers from seeking our services. This could have a material and adverse effect on our business, revenues and operating results."

IT industry body Nasscom has said the section on H1B visas should be dealt with separately from the overall Immigration Bill. But Indian IT’s lobbying for bilateral conversations to solve the issue appears to have already suffered its first setback.

The Senate Judicial Committee, which started the first round of amendments on the Bill, has allowed the section on H1B visas to remain largely unchanged,  indicating that major alterations the IT industry was hoping for may not materialise.   The committee has also not considered some of the more pro-Indian IT proposals.

Sajai Singh Partner, J Sagar Associates, says, "At present, it looks bleak for IT industry, its business model and pricing."

However, all is not lost. The Bill will go through a series of amendments and discussions in the coming weeks, before being debated by a full senate. The actual passing of the law is not likely to happen for at least another 5-to-6 months.

With high-profile US tech companies, looking to bring in more skilled foreign workers, are pushing for concessions and have considerable clout, the balance could tilt eitherways.

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