When good news on H-1B visa sounds bad

HYDERABAD: News about the US H1-B visa cap reaching the limit in the first few days offers both cheer and despair for home-grown IT & ITES companies.

Demand for H1-B visas -- that allows firms to send Indian employees to work for US clients -- indicates the growing business momentum. But with the limit breaching early, companies are concerned if they would get lower than expected number of visas.

For 2013, the limit is set at 65,000. H1-B visas are given for skilled professionals comprising scientists, engineers and computer programmers.

Companies can also send employees abroad on L1 visas, considered as internal transfers. But while on L1, employees will be on Indian payrolls, H1-B visa holders figure on US firm's payrolls.

'It's like a party companies may not be able to enjoy. If the limit has been reached early, it means there's demand and businesses are growing.

But, we won't be able to send many people because of the cap and random selection process,' said Dayakar Reddy, Managing Director, Moschip Semiconductors Ltd, which is into embedded chip designing.

The demand for H1-B visas comes at a time when the US job rate dropped to a four-year low of 7.6 per cent in March, 2013 when only 88,000 new jobs were created as against February's 268,000.

Demand for these visas plunged in 2008 following the global recession and it took about 264 days for the H1B quota to be used up in 2009, about 300 days in 2010, 235 days in 2011 and 73 days in 2012.

'It's a sign of economic recovery. Indian IT companies will be able to do more business and software exports from the country are set to increase.

It also means companies now have the fiscal comfort to send more number of employees abroad, which again is a sign of growing business prospects,' said J A Chowdary, Executive Chairman, Talent Sprint, an IT talent training institute.

In 1998, the cap was increased to 115,000 and later to 195,000 for 2001, 2002 and 2003. In 2004, the cap was back to 65,000 when the temporary increase mandated by US Congress expired.

Lottery system has been used to select applications randomly in the past once in 2007 and 2008, when the 65,000 cap had hit the peak within the first week.

'We have to wait and see if our stars turn lucky this year, if employers get lower than anticipated visas. Or wait till next year to work abroad,' said Vamsi Chaitanaya, working in a leading IT firm.