The US visa tangle: Indian IT workers face uncertainty, jobs may shift home

As Indian IT workers in the US face sudden upheaval ahead of mid-term elections, new jobs may be opening up in India

Sanjay Kumar, a resident of New Jersey, has suddenly found his life upended. The IT worker’s H1-B visa extension is stuck in a queue. And it may be a long one. 

The reason: On October 8, the US government, with an apparent eye on midterm elections, suspended eight major tech companies from the PERM labour certification programme, the first step to a green card and permanent residency. 

The move restricts highly skilled foreigners like Kumar from living and working in the US for one of the eight affected companies — Microsoft, Adobe, Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, Capgemini and Cognizant. 

The H1-B visa is typically granted in slabs of up to three-years, with a maximum of six years. A large number of beneficiaries are from India. 

Kumar works for one of the companies that were suspended by the US Department of Labour from PERM — short for Permanent Labour Certification — programme. 

“The issue is that there is no communication on when the extension will be granted. After the expiry of my H1-B visa I still get a grace period of eight months as my application has been submitted. But if my approval does not come through within that period, I have to pack my bags,” he said. 

According to Kumar, these companies now have two choices — either send affected workers across the border to their offices in Canada, where, too, they have to wait for the US immigration department decision, or ask them to go back to their home country. 

Uncertain future 

Another Indian worker, Vivek Rastogi has spent four years in the US on an H-1B visa and is now waiting for his employer to start his green card application process. Rastogi's employer isn’t among the eight companies but he, too, is worried. 

Rastogi’s concern: Even if his employer does start the process, what if his application comes under extra scrutiny, given that the eight companies include large Indian IT service players? 

“This creates a lot of uncertainty. I am not sure if I want to be here, but then a lot of this now depends on my company,” he said.

The uncertainty has spread to India too. According to sources in the industry, visa clearance has come to a near-halt. “I think the consulates (across India) are releasing very few dates for applications. So an employee may have received an extension, which means they can stay in the US for another three years — but since their visa is not stamped, for which they need to come to India, they cannot travel,” said an employee of a mid-cap IT firm. 

 

Negative view of immigrants 

Cyrus Mehta, an immigration lawyer in the US and founder of Cyrus D Mehta & Partners PLC, pointed to a wider problem: “Nothing positive is being said on immigration or immigrants. This administration does not even view immigrants as making any contribution towards the US.” 

The most recent stricture against the eight technology companies comes just ahead of mid-term elections, scheduled for November 3. 

Mehta said the Donald Trump administration is using executive orders and regulations to implement changes to visa rules. “For instance, the automatic extension of employment authorisation for H4 (a spousal visa) is no longer allowed. One has to apply well in advance and if there is a delay in the issuance of the employment authorisation, the spouse has to stop working,” he said on a call from the US. 

For many large Indian IT services firms, the recent visa move will not have much of an immediate impact. The number of PERM registrations from leading Indian IT companies has in any case come down significantly. 

Aarthi Subramanian, executive director, president and COO, Tata Consultancy Services (TCS) in an earlier interview told Business Standard, “If you look back, the number of H-1B visas we apply for has significantly declined over the years. The number of people converting from H-1B visas to green cards over the last two years would probably be in single digits. So, this is not a major issue for us. We no longer rely on this mechanism to service our customers because we have shifted towards investing in and hiring local talent. More than 50 per cent of our employees in North America, which would be over 30,000 people, are local hires.” 

However, industry experts and analysts feel that there will be some impact, especially on margins and people strategies – whether to move staff to India or Canada, and for how long, for instance. 

 “Our estimates suggest negligible immediate revenue impact, but 10-30 basis points (bps) of operating-margin pressure over the next 12 months, primarily due to the need to retain experienced US-based staff and hire replacements. If the suspension persists for several years, margin pressure could rise to 30-75 bps, with revenue coming in 0.25-0.75 per cent below otherwise expected levels,” said Gaurav Vasu, CEO and founder of Unearth Insights. 

GCC potential 

Some believe that global capability centres (GCCs) in India may see a slow boost (rather than an overnight rush) as many firms would want to have a team in India. 

Avinash Vashistha, chairman and CEO, Tholons, a global strategic advisory and digital transformation firm, said: “GCC decisions take 6 to 12 months to move from board approval to operations. The first wave will be expansion of existing India GCCs, as companies shift roles they can no longer fill or retain in the US. New GCC set-ups will follow through 2027. This is not a short-term spike. It is a sustained increase in the pipeline,” he said. 

In addition, new GCCs will come from companies that may never have planned one. 

“Large tech and banking firms already have scale in India. The next wave will be mid-size US and European enterprises in healthcare, insurance, retail, manufacturing and energy. Many of them relied on IT vendors to supply skilled visa talent onsite. With that channel now uncertain, owning their own capability in India becomes the lower-risk option.” 

Experts said companies may move their own senior employees, stuck in long green card queues, into leadership roles at their India GCC rather than losing them. That would bring global experience, client context and decision-making authority into India. 

(The names of the two US-based IT workers have been changed)