H-1B VISA BAN: HOW FAR INDIAN IT FIRMS ARE GOING TO SUFFER? - CRISIL REPORT

A domestic rating agency on Monday confirmed that the suspension of H-1B visas by Trump’s administration will be affecting the IT firms in India.

A cost of Rs.1,200 crore and a marginal percentage of impact will cause a dent on the profitability of the firms. However, local hiring over the last few years, in the U.S. will curb the impact on Indian companies, said Crisil Ratings.

Crisil said that the marginal impact will be over and above 2.50 per cent which is directly due to the covid-19 pandemic. It further added that the operating profitability is expected to be 23 per cent.

"New H1-B visa issuances contribute less than 5 per cent of the US onshore workforce of the top 5 listed Indian IT firms, which account for 60 per cent of the industry revenue. On the other hand, the share of local hires in their US onshore employee mix has steadily increased from 30-35 per cent in fiscal 2017 to about 55-60 per cent in fiscal 2020,” Crisil’s senior director Anuj Sethi said.

"Additionally, with higher share of employees working from home and with continued restrictions on mobility due to the pandemic, the onshore requirements of IT firms are likely to be lower," said Sameer Charania, the director of Crisil.