Indian IT services giant Tata Consulting Services (TCS) has said as many as half of its visa applications to the US are now being rejected as Washington continues to clamp down on immigration ahead of a new bill passing through Congress.

TCS global head of human resources, Ajoyendra Mukherjee, told news site Livemint that the 50 per cent rejection rate had forced the company to increase hires from the US and Canada by a third this fiscal year, from around 450 to 600 each quarter.

On paper, the figures could be worrying for an Indian IT industry waiting with bated breath to see whether a divided House of Representatives passes the Senate-approved immigration bill.

Nasscom has already branded the Border Security, Economic Opportunity and Immigration Modernization Act “discriminatory” because it could put strict limits on the number of H-1B visas – the class of visa granted to temporary foreign workers.

It has been argued that this could put a strain on the coffers of Indian firms as US hires would push up the wage bill and associated costs.

However, Mukherjee told the news site that this is not necessarily the case.

“At the junior level (in the US), it’s probably less expensive to hire someone locally than taking someone from India. Everyone thinks getting someone from India would be cheaper, but it’s not true – it’s more expensive at the junior level,” he said.

TCS has apparently visited 35 universities in the US to hire fresh off the campus, as part of this strategy.

Nevertheless, the high rejection rates for visas are still thought to push up the cost of doing business in the US.

The 50 per cent rejection rate, which Mukherjee said has been on-going for the past couple of years, is thought to have jumped from around 30 per cent prior to that as US lawmakers warm to a protectionist agenda.

Gartner has warned that “risk mitigation and contingency planning are strategic imperatives for enterprises with outsourcing deals that utilise India-based talent”. ®