Tightening visa norms blessing in disguise for IT firms: Pai
Former Infosys director Mohandas Pai has said the tightening of the US H-1B visa rules is a "blessing in disguise" for Indian IT firms. "I don't think they need to be scared or anything," he stated. The new regulations would play to Indian IT companies' strength because they have been reducing the number of H1-B visas since 2014, Pai added.
Hyderabad, Apr 12 (PTI) The tightening of H1-B work visa rules in the US would be advantageous to Indian IT firms as they would shift more work offshore and also be in a position to improve their billing rate, says industry veteran T V Mohandas Pai. The present business model of Indian IT companies -- offshore-onsite work ratio of 70:30 would now go up to 90:10, the former Chief Financial Officer of Infosys said. "So, what will happen is they (Indian IT firms) will offshore more work and increase their competitiveness. They will do only ten per cent work onsite, and 90 per cent offshore," Pai told PTI. "It can be done very easily for 70-80 per cent of the business. It will improve their competitiveness and make them better," he said. "The new H1-B regulations are very good for Indian IT, and bad for companies which try to use it for cheap labour. First of all, Indian IT is not cheap because what they bill to clients is USD 125,000 to USD 150,000 per year (for an onsite employee)," he said. "The average pay is around USD 80,000-85,000 per year. They are unnecessarily getting a bad name, because some fly-by-night operators are trying to do body-shopping and spoil the name of the entire (Indian IT) industry," he said. The new regulations would play to the strength Indian IT companies because they have been reducing the number of H1-B visas they collected since 2014, he said. "So, they are already getting prepared. It will increase the billing because it will create artificial scarcity in America, and allow Indian companies to bill more for work because there are not enough Americans to fill the positions that are needed", said Pai, who is Chairman of Manipal Global Education Services and Aarin Capital. "Its a blessing in disguise, I dont think they need to be scared or anything," he said. 