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 BENGALURU

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 onetime fee for H-1B visas from the current $1,000 to $100,000 starting next year. The target is the alleged misuse of H-IB 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.

"The question is, how impactful are the letters by Chuck Grassley and Dick Durbin? In my opinion, very. There could be potential senate investigations into the issue of H-1B visas, and leaders of all the companies could be called to give sworn testimonies before the senate," said Russell A. Stamets, a partner at Circle of Counsels, a New Delhi-based law firm.