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Originally Posted by JMaruru On the other hand, the H1-B bill, will have silent(behind the scene) and influential opponents in the IT and allied Industry lobbies. Having said that, the Trump administration banning the political lobbies in the hill might have some impact on this bill. |
Actually, this bill is lot tamer than what was expected. The AG nominee Jeff Sessions wants to entirely eliminate H1B program. This bill looks like a compromise between the two extreme groups.
H1B has always been highly beneficial to companies and very unfair to employees, both US and foreign. H1B allowed
labour arbitrage, which Indian IT companies exploited to the hilt. TCS was the largest Indian software company 25 years ago, itself has grown 100 times in size thanks to H1B. This phenomena kept the IT wages stagnant in US for a long time. People are still making roughly the same amount I used to make 15-20 years ago in USA.
Meanwhile, it pushed the IT salaries in India into the orbit. This killed the domestic IT industry to a large extent. Major IT projects in India are often executed by large IT companies like TCS/Infosys at below cost as showcase projects. Since they make obscene profit from H1B bodyshopping, they don't mind giving away domestic projects at below cost, for training their staff. So Indians got used to paying very little for software.
As a result, Indian IT service companies can't survive on domestic business at all. Nobody wants to pay fair price for Software development in India. I have lost count of the number of times I have been asked to develop and supply software at 25-50% cost.
Example:
Domestic customer: I want a custom software that does XYZ.
Domestic vendor: Sure, it will take 5 engineers 6 months to develop this.
Domestic customer: Great, I have a budget of ₹10L for this.
Domestic vendor: ![EEK!](https://www.team-bhp.com/forum/images/smilies/eek.png)
Sir, just the salaries for 5 engineers for 6 months will be ₹15L. Now add the overhead costs and fixed costs, which will be at least ₹10L more. My cost alone will be ₹25L. I have to charge at least ₹30L.
Domestic customer: I don't know all that, if I am paying ₹30L, I can go with bigger companies like TCS/Infosys (who will do it below cost).
Therefore, this H1B restriction may finally revive domestic IT services industry. Yes, it also means IT salaries which is artificially kept high, will tank and software services price, which is artificial kept low, will finally raise.