US senators mount scrutiny on IT cos

Even as US president Donald Trump's steep hike in H-1B visa fee threatens to hit Indian software services providers, US lawmakers and agencies have separately intensified scrutiny of the offshoring sector.

- Jas Bardia & Varun Sood

Homegrown Tata Consultancy Services Ltd (TCS), the country’s largest information technology (IT) services company, and India-heritage Cognizant Technology Solutions Corp. were among the companies targeted by two senators, Republican Charles E. Grassley and Democrat Richard J. Durbin, over hiring practices.

A third senator, Tom Cotton, is considering bills to reform the H-1B programme, while his Republican peer Bernie Moreno has proposed an HIRE Act to increase taxes on companies offshoring work.

Growing scrutiny makes the $283-billion local outsourcing industry even more vulnerable after Trump signed an executive order to increase the one time fee for H-1B visas from the current $1,000 to $100,000 starting next year. The target is the alleged misuse of H-1B visas, which enable highly skilled non-immigrants to work in the US temporarily.

These permits are issued for three years with an option to renew for up to six years. Indian IT companies accounted for 70% of such visas issued in 2024.