IT blue chips slip as US toughens H1-B Visa norms

The US government has announced a new visa policy which puts the onus of proving that the sponsored employee deployed at a third-party worksite is truly eligible for the H-1B visas on the companies.

The policy empowers the immigration authorities to issue H-1B visas to candidates only for the period for which they have work at the third-party worksite. Earlier it was issued for three years at a stretch. Also, employers have to provide evidence of work assignments etc, involving extensive paperwork. The new directives are effective immediately, ahead of the H-1B visas filing season for 2019 starting from April 2.

Though the policy aims at protecting American workers, due to a shortage of specific skills it will only hurt the American industry, believe experts. Around 7,50,000 Indian software engineers would be impacted by this decision. Top tech companies like Microsoft, Google, Amazon, and Apple employee foreign workers who come to the US on H1-B Visas. Also leading financial service companies like Accenture, Deloitte, E&Y employee H-1B visa holders.

With the help of H-1B visas, Indian IT companies deploy many employees at third-party worksites including TCS, Infosys and Wipro. It would be especially difficult for IT companies and software professionals to extend their H1-B Visas when their projects expire and they are waiting for another project or for the green card.

Following the news, IT stock including Wipro was trading at Rs. 294.50 per share, down by 0.72 per cent, TCS was at Rs. 3,066.60, down 0.86 per cent, Infy was at Rs. 1,157.30, down 0.28 per cent on Friday.  But overall the Nifty IT index and BSE IT were marginally in the green, mostly due to the phenomenal upward rally by Mindtree. The stock of Mindtree was trading at Rs. 804.00 per share, up by Rs. 64.00 or 8.64 per cent at 15:03 hours on Friday.