The Indian IT industry may be eyeing 16-18 per cent export growth next fiscal, but that is unlikely to culminate in a big rush for H-1B visas. These are non-immigrant visas that allow foreign workers to stay and work in the US for up to six years.

Even as the US gears up to open its H-1B application counters on Friday, many in the industry foresee only ‘need-based' filing by Indian tech employers, and that too spread over many months. Companies such as MindTree feel that the demand for H-1B visas remains low due to the sensitive political environment on outsourcing (in the US) as also increased visa costs.

Industry body Nasscom expects the H-1B pool to last till December at least, broadly in line with the pattern seen over the last two years. For the record, the cap for fiscal 2011 was reached only in January-end this year, ten months after the US first started accepting applications for the year. While the numerical limit on H-1B visa is 65,000, the first 20,000 H-1B petitions filed on behalf of those with US masters' degree or higher, are exempt from the fiscal cap. The application process, which starts from April 1, pertains to the ensuing October employment season.

Campus hiring

“While the business-related visas are easier to predict due to business trends, the unknown element is of companies (Indian, MNC and American) hiring from campuses. Even then, I would not think the number would be dramatically higher this time,” the Nasscom President, Mr Som Mittal, said.

Mr Mittal is also quick to point out that the H-1B visas are used by not just Indian companies but by MNC companies as well.

“There was a time, a few years ago, when the visas would get exhausted by July. This led to a (demand) pipeline, where people would apply for visas in anticipation. That situation has changed today. More importantly, the business models have changed and Indian firms are aggressively hiring locals in the US and also going after acquisitions,” he said.

Recent allegations of visa fraud and discrimination against industry leader Infosys in the US may have also dampened overall sentiment. Industry watchers feel that there is a need to correct the perception, that Indian vendors in the US are taking away American jobs. That concern itself might prevent a rush for H-1B visas.

The MindTree CFO, Mr Rostow Ravanan, notes that with the political outlook on outsourcing still conservative, “onsite, vendors are keen not to create waves by placing a huge number of H-1B visa holders.”

Scrutiny of visas

“Further, the cost of visas is also high, about double the earlier rate. Earlier, the industry used to apply for visas en masse so that you have ready-to-travel people across all categories, but now, if you pay for it and not use it then it is a big hit to your bottom line,” Mr Ravanan said, adding that the scrutiny of visas had also gone up significantly in recent times.

Such concerns also resonate in a recent report by CLSA which has flagged the doubling of rejection rates for H-1B and L-1 visas over the last few months.

“Checks indicate that H-1B/L-1 visa rejection rates have doubled from 4 per cent to 8 per cent for larger companies with even higher rejection rates for smaller companies…While the near-term impact for Indian tech players could be lost revenue and higher sub-contracting costs, medium /long term impact could be in the form of higher onsite delivery costs and lower competitiveness in select cases,” says the CLSA note released earlier this month.

Some ARE optimistic

Still, some, such as Mr Ganesh Natarajan, Vice-Chairman and CEO of Zensar Technologies, are taking a more optimistic view of the demand scenario this season.

“I do not expect a mad rush but certainly the demand from Indian companies will be double of last year. However, the quota, in my opinion, will not get exhausted till September-October timeframe…As it is, mature companies are doing a lot of dual-shore work and are also hiring people locally,” Mr Natarajan said.

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