Will Indian IT companies be forced to exit H-1B visa program? Steep fee hike to make significant dent in pockets

 Will Indian IT Companies Be Forced to Exit H-1B Visa Program? Steep Fee Hike to Make Significant Dent in Pockets

 

The recent hike in H-1B visa fees has sparked a wave of concern among industry representatives and immigration experts, with many warning that it could significantly challenge Indian IT service providers and strain their finances. The increased costs could potentially force these companies to reconsider their participation in the H-1B visa program, which has been a cornerstone of their operations in the United States.

 

The Dependence on H-1B Visas

Indian IT companies heavily rely on H-1B visas to bring thousands of highly skilled professionals to the US, filling specialty positions that are in high demand but short supply. This dependency is underscored by the fact that these professionals play a crucial role in maintaining the competitiveness and operational efficiency of these companies within the US market.

 

Substantial Fee Increases

In April, the United States Citizenship and Immigration Services (USCIS) implemented significant fee hikes for various immigration processes. Notably, the H-1B visa registration fee surged by an astounding 2050%, jumping from $10 to $215. Additionally, the application fee saw a 70% increase, rising from $460 to $780. A new $600 asylum fee was also introduced for filing H-1B and other petitions, which many experts argue is unrelated to non-immigrant work visas like the H-1B.

 

"The drastic percentage increase and added asylum fee all at once makes things difficult," remarked Shivendra Singh, vice president of global trade and development at Nasscom, an industry association.

 

Financial Implications for Employers

An analysis by the National Foundation for American Policy estimates that these visa fee hikes could result in employers spending over $33,000 in legal and government fees for each H-1B visa petition filed for initial employment or employment extension. This substantial financial burden raises questions about the sustainability of these costs for Indian IT companies.

 

Potential Withdrawal from the Visa Process

Jonathan Wasden, managing attorney at immigration litigation firm Wasden Law, has expressed concerns that the new rules might force Indian IT companies to withdraw from the visa process altogether. Unlike tech giants like Apple and Google, or banking institutions that may only file one H-1B petition every three years, Indian IT firms are likely to incur significantly higher costs due to the need to file petitions more frequently.

 

Wasden believes this is a deliberate attempt by USCIS to eliminate Indian IT companies from the H-1B program. "It is no secret to anyone who practices employment-based business immigration that USCIS has been trying for decades to eliminate Indian IT companies from the H-1B program. This is merely the latest tactic to achieve this goal," Wasden told ET. "They are trying to make the process so expensive for companies doing third-party placement that they will go out of business," he added.

 

Impact on Indian IT Companies

Nasscom has also voiced concerns about the impact of the fee hikes on their member companies. Shivendra Singh noted that the increase in filing fees comes at a time when there is a significant demand-supply gap in skills availability. He warned that any measure that complicates and raises the cost of addressing this gap could have a substantial impact on the ease of doing business and adversely affect the competitiveness of the US economy.

 

Moreover, Singh pointed out that the proposed modernization rule provisions, which aim to narrow the criteria for 'specialty occupation' and H-1B employees staffed at third parties, could have serious consequences if implemented in the future.

 

Future Outlook

While some experts believe that the fee hikes will lead to a decrease in the use of H-1B visas over time, others suggest that companies will continue to bear the costs to secure the skills they desperately need. Cyrus Mehta, managing partner at immigration law firm Cyrus D Mehta & Partners PLLC, noted that Indian heritage companies have started to absorb the fee increase, viewing it as a cost of doing business in the US.

 

However, Mehta also cautioned that the fee increase could become a burden, particularly for India-born workers caught up in green card backlogs, as H-1B extensions will need to be filed repeatedly on their behalf.

 

The steep hike in H-1B visa fees presents a significant challenge for Indian IT companies, potentially forcing them to reassess their reliance on the program. While some firms may absorb the costs to maintain their competitive edge, the increased financial burden could ultimately reshape the landscape of the IT services industry in the US. As the situation unfolds, it will be crucial for companies to navigate these changes strategically, balancing cost management with the need to secure to