Nifty It Index witnessed a freefall in Friday’s (6th January 2017) as a result of the re-introduction of a bill backing key changes in the H1-B programme. H1-B programme allows the skilled workers from countries like India to fill high-tech jobs in the US.
Nifty It Index saw a dip of 2.79 per cent yesterday, which was at par with its weekly fall of 2.78 per cent. Since the Union Budget of 2016 IT Index has dropped 3.37 per cent.
Major Indian IT companies were affected by this news too.
The ‘Protect and Grow American Jobs Act’ was re-introduced on Wednesday, 4th January 2017, by long-time Republican Congressman Darrell Issa. The bill proposes important changes to the eligibility requirements for H1-B Visa exemptions. The bill also received the backing of fellow Congressman Scott Peters.
Among other things, the bill increases the minimum salary of H-1B visa holders to US$ 100,000 per annum. It also eliminates the Masters Degree exemption. For many young Indians this visa is the passport to success in life as it inevitably leads to a Green Card for them.
But according to Congressman Issa, in order for America to lead again, the country needs to ensure that it can retain the world’s best and brightest talent. At the same time, it also needs to make sure programs are not abused to allow companies to outsource and hire cheap foreign labor from abroad to replace the American workers.
What does this mean for Indian IT Companies?
The tightening of H1-B visa regulations as well as other administrative measures may trigger panic in the Indian IT sector which also hosts a wide variety of outsourced back-end jobs. This nervousness was earlier reflected in the shares of IT companies at the Indian Stocks Exchanges following the news of reintroduction of the legislation regulating H1B visas. Stocks of Indian IT corporate like Infosys (NS:INFY), TCS and HCL Tech fell one to two per cent.
Article written by
Nabarupa Kanjilal