Industry body Nasscom today warned that the US’ move to replace the lottery system for issuing H-1B work visas with a merit-based approach could have “unintended consequences” even as it sought to downplay any immediate impact on IT companies this year.

Under a new executive order signed by US President Donald Trump, America is reviewing its visa programme for foreign workers, while ensuring a crackdown on visa abuse and frauds.

The H-1B visa programme is most sought-after by Indian IT firms and professionals to work on customer sites. Every year, the US grants 65,000 H-1B visas, while another 20,000 are set aside for those with US advanced degrees.

“No new changes are being implemented immediately. Nothing is being proposed that would impact or change the FY18 H-1B lottery that is currently underway,” Nasscom said in a statement. The proposed changes are forward-looking and non-specific, it contended.

Any change in visa norms can affect the movement of labour as well as spike operational costs for IT players. Most Indian IT companies get over 60 per cent of their revenues from the North American market.

The Indian government, on its part, has said it will take up the issue with the American authorities during the upcoming visit of Finance Minister Arun Jaitley to the US.

Another industry body Assocham also expressed concern over the tightening of the visa norms. “Indian IT companies are bound to face disruptions by way of higher costs and even some laying off work force back home, as the rising rupee is aggravating the situation further for the technology export firms,” it said.

Indian IT firms, however, put a brave face to the impending changes being mooted by the US. “We continue to invest in the local communities in which we operate, including hiring local American top talent, bringing education and training to our clients to shrink the skills gap in the US, and working with policymakers to foster innovation,” Infosys said in a statement.

Larger rival TCS, too, has exuded confidence that these issues can be tackled through greater engagement. It has also said it will “tweak” its business model to continue to be in compliance with regulations.

With rising protectionism across markets like the US, Singapore and now Australia, companies are beginning to adjust their business models to reduce their dependence on visas, hiring more locals instead.

Nasscom also highlighted that there is shortage of highly-skilled domestic talent in the US in IT, healthcare, education, and other fields.

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