IT veteran Mohandas Pai says rigorous visa rules a blessing in disguise for Indian IT firms

Information Technology industry veteran T V Mohandas Pai has said that stricter H1-B work visa rules have come as a blessing in disguise for Indian IT firms.

Pai, who is the former Chief Financial Officer of Infosys, is of the view that now, these firms would shift more work offshore, while also being in a position to improve their billing rate.

Indian IT companies currently follow a business model of offshore-onsite work ratio of 70:30, which would now go up to 90:10, said Pai.

Also read: With tougher visa rules, India is sending only its real talent to the US

"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 said.

"It can be done very easily for 70-80 per cent of the business. It will improve their competitiveness and make them better," he added.

"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.

Also read: Here’s why US cannot afford to lose H1B professionals. This is what’s at stake

"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.

He added that these regulations would strengthen Indian IT companies that they have been reducing the number of H1-B visas they collected since 2014.

"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."

Talking of the possible downsides on the visa front, Pai said that the coming six months would be shadowed with some uncertainties about the work processes of the US Labour department.

(Image source IB Times)