The recent fee hike signed by US President Barack Obama may affect the two Indian tech giants in trouble. The temporary H-1B work visa will observe a hike to around US$ 4000, while the L-1 Intra company Transfer visa shot up to US$ 4,500 per visa application. These high demand visas are used by companies like Infosys and Tata Consultancy Services on a regular basis to send qualified IT engineers and administration staff to the US. A statement made by IDFC Services, a leading investment banking concern based in Mumbai, says that these two mentioned IT companies will be hit the hardest as a huge amount of income comes from the outsourcing business set in the US.
Facts in numbers
US based income makes up about 60% of Infosys’ income. While the other giant TCS rakes in 50% from the North American continent, which also includes the US. These two companies make up the largest sum of visa applicants and immigrants to the US. Wipro and HCL Tech take up the 3rd and 4th spots to complete the list. These frontline IT companies also make at least 50% of their revenues from doing business in the US. In 2014, out of the 65,000 H-1B visas cap visas issues, about 70% were issued to Indian organizations. Out of which TCS outdid the rest by 5,560 H-1B visas, while Infosys were issued 3,454 H-1B visas, followed by Wipro with 3,048 H-1B visas. Among Indian concerns, TCS uses the L-1 visa the most while Infosys is a lot more dependent on the H-1B visa.
Predictions and affects
According to IDFC Securities, Infosys spent INR 1,800 crore in the financial year 2014-2015. TCS in the same year spent a higher figure at INR 2,400 crore. Recent changes may quadruple the expenditure of the company, forcing them to increase their fees which might also affect their density of clients and hence, projects and employments in these IT companies. There is hope among some quarters that there will be some concession or understanding of sorts to smooth over the fee hike issue in the coming months.
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Original Source: NDTV