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Vipin V. Nair

Mr Karnik says the issue of limited availability of H1-B visas will not be of much concern in 3-4 years from now as more software development will move offshore. "But yes, after a year or so and till about 2006, we might feel the shortage of visas as the present cap of 65,000 is far too low,"

New Delhi , Oct. 5

THE decision of the US to lower the ceiling of H1-B visas will not impact the Indian software industry in the near future, as an estimated four lakh H1-B visa holders are now available in the country.

H1-B visas are valid for three years and are extendable for another three. "There is enough stock of H1-B visa holders and so we don't see any immediate impact," said Mr Kiran Karnik, President of the National Association of Software and Service Companies (Nasscom).

Even if many of the existing visas are to expire over the next one year, the industry will have sufficient people who are eligible to travel to the US, Indian software industry's biggest market.

Every year, India accounts for the lion's share of H1-B Visas issued by the US.

Out of a total 1.95 lakh, the US issued only 80,000 and 70,000 H1-B visas worldwide in 2002 and 2003 respectively as the need for such visas dwindled in line with the economic slowdown.

From October 1, the US brought down the total number of H1-B visas to 65,000 from 1.95 lakh.

In fact, India has been consuming less and less H1-B visas in the past two years as the economic slowdown impacted the technology sector.

But it is still the largest user of H1-B visas when compared to other countries.

If India got 77,000 H1-B visas in 2001, it used just 33,000 visas in 2002. In 2003, it is estimated that use was even less at about 30,000, Nasscom says.

The statistics released by the US Department of Homeland Security, says India accounted for only 21,006 H1-B visas in 2002.

Mr Karnik said the issue of limited availability of H1-B visas would not be of much concern in 3-4 years from now as more software development would move offshore.

"But yes, after a year or so and till about 2006, we might feel the shortage of visas as the present cap of 65,000 is far too low," Mr Karnik said.

An economic recovery in the US over the next one year, if happens, will spur technology spending and fuel the need for more skilled workers.

"It will not be possible to have a sudden transformation from onsite to offshore. If the ceiling is kept low, we may have some concerns," he said, while expressing the hope that the US would raise the ceiling in line with any economic upswing.

Among those who will feel the pressure because of the shortage will be start-ups and small and medium sized software firms.

"If you don't have enough number of H1-B visa holders and the cap is already reached, then you will be in trouble," Mr Karnik pointed out.

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