New US immigration bill to hit earnings of IT firms in India, US
29 Jun 2013
The new immigration bill passed by US Senate on Thursday , could adversely impact the profitability of IT companies in India and the US, if it sails through the House of Representatives and is signed into law by President Barack Obama, the chief proponent of the legislation.
Analysts estimate that if the new bill if passed into law in its present form could dent earnings of top five Indian IT firms such as Tata Consultancy Services, Infosys, Wipro, HCL Technologies and Tech Mahindra by 12 to 25 per cent.
Tata Consultancy Services (TCS), India's top IT service provider, today said if the the new legislation would not only affect Indian IT firms but US companies as well.
"The comprehensive immigration bill will not only impact companies like us, but all US companies," TCS managing director and chief executive N Chandrasekaran told reporters on the sidelines of company's annual general meeting.
TCS, he said, is carefully observing the development. "The bill has to go through multiple stages, further process is lengthy and it has passed through only the first stage," he added.
The bill passed by the Senate 68:32 has some provisions against the Indian IT sector, which include increased visa fees, caps on the placement of H1-B workers in client sites and reduction in the number of H1-B workers in the workforce of these companies from about 75 per cent to 50 per cent in the next three years (See: New US immigration bill gets Senate nod).
IT companies are now looking to the Republican-controlled House of Representatives to pass a diluted version of the bill that would be more balanced in favour of corporates.
Supporters of the overhaul of immigration bill are also expected to move something similar through the Republican-controlled House of Representatives.
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