H1-B visa suspension to have Rs 1,200-cr impact on Indian IT firms: Crisil
July 06, 2020 15:42
Suspension of the H1-B visas by the US will cost domestic IT firms Rs 1,200 crore and have a marginal 0.25-0.30 per cent impact on their profitability, a domestic rating agency said on Monday.
An increase in local hiring over the last few years since the US the largest market for Indian IT firms - started curbing the visa issuances will help limit the impact on the Indian IT companies now, Crisil Ratings said. It can be noted that last month, the visas used by Indian tech professionals to work out of the US were suspended by the Donald Trump administration as it looked to arrest the rising unemployment.
Crisil, however, said that the marginal impact will be over and above the up to 2.50 per cent decline in IT firms' profits because of the COVID-19 pandemic and added that operating profitability is seen at 23 per cent in FY21 as per an analysis of 15 top firms' performance.
The US move on the H1-B and L1 visas will have limited impact because of the lower reliance on the entry system by hiring locally, it said, adding that renewals of the visas will be unaffected. -- PTI
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