New US visa rules pose risks to Indian businesses

Any rise in the costs associated with US visas generally results in a direct impact on the profit margins of Indian businesses, particularly the IT services industry in the country, which gains a large amount of its revenue via exports to the United States.

President Barack Obama recently renewed his authorization for the special fee that applies to non-immigrant US visas for businesses that have more than half of their workforce be foreign workers, but had it doubled to as much as $4500 for L-1 US visas and $4000 for H-1B US visas. The special fee that applies to non-immigrant work US visas was initially introduced in 2010 via the James Zadroga 9/11 Health and Compensation Act.

The fee initially caused a lot of resentment in India as it was primarily Indian IT companies that went over the “half the workforce” limit. The larger IT companies in India have more than half of their workforce onsite in locations that are generally filled by the holders of H-1B US visas. The increased new fee will cost the industry an extra $400 million per annum, according to estimates from Namcom.

The Indian government has gone to the World Trade Organization about the US visa fee increase, claiming it is inconsistent with the United States’ commitments according to the General Agreement in Trade in Services, but there is even more concern about the growing protectionist stance of other nations, which want to support their own industries.