TCS, Wipro, Infosys, HCL: US H-1B visa policy reforms can positively affect the Indian IT firms- Report

Recent discussions surrounding reforms to the H-1B visa policy indicate potential benefits for Indian IT services firms, despite their relatively small share of total visa sponsorships, according to a report from Macquarie Research, as reported by the Economic Times. The research notes the ongoing challenges of hiring local talent in the US and emphasises the indispensable role of H-1B visas in addressing the critical shortage of technical expertise.

Concerns Over Flat Wage Proposal

Macquarie has raised concerns about a new proposal suggesting a flat wage floor for H-1B visa holders. A flat wage is a fixed amount of pay that does not change based on location, job specifics, or cost of living.

The brokerage thus argued that this idea is not practical because the cost of living in the US varies greatly from one region to another. For example, what works as a fair wage in a small town might be too low for someone living in an expensive city like New York. A standardized wage could unintentionally create more economic inequalities between different areas.

To address this, Macquarie suggested that instead of tying H-1B visas to specific employers, they should be turned into general work permits, similar to Norway’s skilled work permit system. This change would give workers more flexibility to switch jobs, encourage healthy competition among employers, and better protect workers' rights.

H-1B Visa Sponsorship Analysis for FY24

In fiscal year 2024, the top seven Indian IT companies collectively saw only 7,299 H-1B visa petitions for new employment approved, marking a dramatic decrease from the 14,792 approvals reported in fiscal year 2015. This analysis, conducted by the National Foundation for American Policy (NFAP), a non-partisan think tank based in the United States, highlights a significant downward trend in approvals for these firms.

In terms of individual company performance, Amazon led the pack with 3,871 H-1B approvals for initial employment—down from 4,052 in FY23 and 6,396 in FY22. Following Amazon were Cognizant with 2,837 approvals, Infosys with 2,504, and Tata Consultancy Services (TCS) with 1,452. Other notable companies included IBM (1,348), Microsoft (1,264), HCL America (1,248), Google (1,058), Capgemini (1,041), and Meta Platforms (920).