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US doubles H-1B, L-1 visa fees for India companies

The money will be used to fund a biometric entry and exit tracking system, and for treatment of 9/11 first responders.

By: ENS Economic Bureau | Bengaluru | Updated: December 18, 2015 10:41:53 am
visa-759 While Indian IT firms are the biggest recipients of the 65,000 H-1B visas allotted annually by the US, they are also provide a large number of jobs.

The imposition of a special fee by the US Congress that effectively doubles the charges for H-1B and L-1 visas could cost IT firms an additional $400 million annually. The special fee of $4,000 has been levied on certain categories of H-1B visas and $4,500 will be charged for L-1 visas over a period of 10 years. The money generated will be used to fund a biometric entry and exit tracking system as also health screenings and treatment for 9/11 first responders.

Nasscom termed the imposition irrational, discriminatory and short-sighted. The IT trade association believes there’s a growing protectionist trend in developed countries like US that wants countries like India to adopt a more liberalised trade and business environment. “This move is contrary to President Obama’s stated support for continued openness and ease of access to the US market by Indian service companies and his advocacy of continued openness of the Indian market to US companies,” Nasscom said.

In the case of Tata Consultancy Services, for instance, the US accounts for 51per cent of its revenue, while for Infosys it is even larger at 63 per cent. In the six months to September, TCS earned a revenue of $4.2 billion from the US while Infosys made $2.9 billion.

While Indian IT firms are the biggest recipients of the 65,000 H-1B visas allotted annually by the US, they are also provide a large number of jobs.

In a report released in September, Nasscom noted Indian that IT companies were providing more than 4 lakh jobs in the US, of which around 3 lakh are held by either US citizens or permanent residents. Indian IT firms have also have invested more than $2 billion in 2011-2013 and paid out $22.5 billion in taxes to the US Treasury in those years, the report said.

According to myvisajobs.com, the top three Indian IT companies — TCS, Infosys and Wipro — have together filed for 46,277 Labour Condition Applications (LCA) for H-1B visas in FY14. Visa costs account for an estimated 1-1.5 per cent of an IT company’s revenues, so any increase on this account will have a direct bearing on operating margins. FE

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