The National Association of Software and Services Companies (NASSCOM) has raised concerns over proposed changes to the U.S. H-1B visa wage modelwarning that it could significantly impact India’s IT services exports and economic contribution. With an estimated $198 billion of Indian IT business tied to H-1B talentthe industry is urging policymakers to consider the far-reaching implications before implementing major reforms.
What the Proposed Changes Involve
The new wage model under consideration in the United States would transform how H-1B visas are allocated. Rather than relying on the existing lottery system, the proposal emphasises a merit-based selection framework that prioritises higher wages and specific skills.
Under this approach:
- Employers may need to offer higher wage brackets to boost chances of selection.
- Prioritisation could lean toward candidates with advanced skills, degrees, and competitive salary offers.
- Lower-paid or mid-tier technical roles may become less likely to secure visas.
While the intent behind the change is to protect domestic workers and ensure foreign talent is highly skilled, Indian industry leaders worry about unintended consequences.
Why India’s IT Sector Is Concerned
India’s IT services industry has long relied on the H-1B visa route to supply skilled professionals — particularly in technology, engineering, cloud computing, and digital transformation roles — to clients in the U.S., its largest market.
NASSCOM’s warning highlights several potential risks:
- Reduced competitiveness: Smaller and mid-sized Indian IT firms may struggle to match higher wage requirements compared to large global players.
- Talent deployment challenges: Many tech projects depend on onsite expertise in the U.S. To deliver seamlessly, companies often deploy Indian professionals through H-1B visas. Restrictions could disrupt project execution and client satisfaction.
- Economic impact: With a significant portion of Indian IT revenue linked to U.S. operations, reduced visa access might slow growth and diminish India’s contribution to global services exports.
Broader Industry Implications
Beyond Indian firms, global clients who depend on skilled talent from India may face higher costs, project delays, and resource shortages. The shifting wage model could influence how companies recruit, budget, and plan long-term engagements.
The industry argues that foreign workers complement — not replace — local workers and that collaboration enhances innovation across markets.
Calls for Balanced Policy
NASSCOM is urging U.S. policymakers to strike a balanced approach that recognises both the need to protect domestic employment and the value of international talent. Solutions could involve:
- Clearer definitions of skill categories
- Flexible wage thresholds aligned with market realities
- Safeguards for smaller firms and startups
By encouraging constructive dialogue, industry advocates hope for a framework that supports economic growth and talent flow without disrupting established global ecosystems.
Conclusion
Proposed changes to the U.S. H-1B wage model have prompted warnings from NASSCOM about risks to India’s IT sector, particularly given the significant economic stake tied to U.S. business. As discussions continue, industry leaders stress the importance of policy that balances domestic job protection with the global mobility of specialised talent.
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