Trump’s new visa rules credit negative for Indian IT industry, may impact margins by up to 5.80%

Amendments to the H-1B visa rules introduced in its largest market US will shave-off Indian information technology companies’ profit margins by up to 5.80 per cent and impact the mid-tier players the most, a report said on Wednesday.

The rules framed by the Donald Trump administration towards the end of its tenure on October 6 are “credit negative” for the sector and will impact companies over a three year period, it added.

The over USD 180 billion Indian IT industry counts on the US as its largest market and sends engineers from India to work at onshore client locations, resulting in the dependency on the H1-B visas.

“The margin impact on full implementation…will be in the range of 2.60-5.80 per cent, depending upon the level of onshore H-1B visas,” rating agency Icra said, adding generally companies have 20-30 per cent employees onshore with 40-50 per cent employed using the H-1B visas.