Tuesday, January 12th, 2016

IT Firms to Raise Client Charges to Combat Increase in Visa Fees

Narada Desk | January 12, 2016 11:48 am Print

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Indian IT firms are considering raising client charges and process more works to mitigate the impact of increased charges for work visas in US. According to investors, US’S new step will cut the profit margins of major IT firms like TCS, Infosys and their like by 50-60 basis points from the next fiscal onwards.

The export driven IT sector in India with a $ 150 potential, generates three fourth of its revenue from the United States, where thousands on employees re sent for onsite works by the tech majors. However with the US Congress passing measures to double the cost of sponsoring workers under the short-term H1B and L1 visas, has raised concerns of future restrictions on IT workers sent overseas before the Presidential election in US.

According to Nasscom’s estimates, the domestic IT firms would incur an additional $400 million a year in costs due to the spike in visa fees. However analysts are of the opinion that, with Indian IT firms reshaping their focus on high-margin digital technology services instead of routine technology infrastructure, maintenance and software application projects, they would need to send fewer staff to client locations overseas and the visa costs will not be posing a long-term threat.

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