After months of anxiety, India’s $150-billion IT outsourcing industry has received a big blow from the Donald Trump government.
On March 03, US Citizenship and Immigration Services (USCIS) said it will temporarily suspend premium processing for H-1B visas from April 03. The H-1B visa allows foreign professionals to work in the US for up to six years and India’s outsourcing firms are among its top beneficiaries, often using the fast-track processing option to fill up positions for new projects on short notice.
Under the premium processing route, applications for the visa are processed within 15 days following the payment of an additional fee of $1,225; the standard procedure, on the other hand, can take three to six months.
“This temporary suspension will help us to reduce overall H-1B processing times. By temporarily suspending premium processing, we will be able to process long-pending petitions, which we have currently been unable to process due to the high volume of incoming petitions and the significant surge in premium processing requests over the past few years,” USCIS said.
In a notice on its website, USCIS noted that the suspension could last up to six months but said it may consider some specific H-1B applications for an expedition in cases of severe financial loss to a company or person, an emergency situation, or for humanitarian reasons, among others.
India’s IT outsourcing industry, which gets over 60% of its revenue from the US, has been fearing a rise in protectionism in its largest market ever since Trump got elected. The temporary suspension is in line with the US president’s anti-immigration stance and could hint at a tighter H-1B visa policy in the future, according to recruitment experts.
“The US government is clearly telling companies to not depend on the H-1B visa going forward,” said Kris Lakshmikanth, chairman of Headhunters India, a boutique executive search firm that works with several Indian IT companies.
And that poses a problem, notably for India’s tier-1 IT service companies, such as Infosys and Wipro.
“Tier-I Indian IT services firms largely use the premium processing category for H-1B visa for their employees, since they can easily afford the additional $1,225 fee. But, there will be uncertainty, as they will have to wait even for ongoing projects,” Pareekh Jain, senior vice-president at research firm HfS Research, told the Business Standard newspaper.
Wipro did not respond to an email from Quartz and Infosys declined to comment.
Ironically, the announcement of the temporary suspension on fast-track processing was made just hours after India’s foreign secretary S Jaishankar and commerce secretary Rita Teotia met Trump’s cabinet and lawmakers in the US. After the meetings, Indian officials had said their “forceful presentation” to the US administration “has been met with a degree of understanding.”
India’s IT industry lobby, Nasscom, noted that US authorities have temporarily suspended premium processing for H-1B visas before but only for a couple of months at a stretch.
“We will work with the US Embassy in India to ensure that mobility of skilled talent is not affected due to process issues,” it said.
But the next six months could be particularly difficult for India’s outsourcing industry .
“Companies don’t typically keep H-1B visa holders on the bench, so there are no such employees to spare for new projects. That means companies will have to hire H-1B holders from other companies if they get new projects. That will come at a high cost now that H-1B holders are in demand,” Lakshmikanth of Headhunters India said.