High unemployment rates and increased scrutiny by the immigration department in the US have increased the woes of Indian information technology services companies.
These firms are already affected by falling margins, delays in getting orders and the ongoing financial crisis in their second-biggest market, Europe.
Industry analysts and IT companies agree the rejection rates of H1 and L1 visas by the US, their biggest market, have almost doubled in the recent past.
After Infosys, the latest to bear the visa brunt is Nasdaq-listed Cognizant, which has been named in a litigation filed by 'disgruntled' employees in the US.
In April, 18 IT employees of US-based Molina Healthcare filed a lawsuit against the company, alleging they were replaced by H1-B visa workers from India and then laid off in violation of the state's discrimination laws, according to media reports.
The lawsuit, filed in the Los Angeles Superior Court, also names Molina's IT vendor, Cognizant.
A company spokesperson said: "It is Cognizant's view that this lawsuit is without merit, and we will vigorously contest it and pursue all legal remedies that may be available to us."
In February, Jack 'Jay' Palmer, a US-based employee of Infosys, had filed a complaint in Lowndes Country, Alabama, alleging that the Bengaluru-based company was misusing the visa programme to bring Indian employees to the US to work at clients' site.
Ajoy Mukherjee, human resources head of India's largest IT services firm, Tata Consultancy Services, agrees the company's visa rejections have gone up by 20 per cent when compared to a period two years back.
"While the guidelines have remained the same, it is the question of application of these guidelines that is leading to rejection," he says.
According to a CLSA report, visa troubles for Indian techies include increased fees, higher rejection rates, difficulties in getting interview appointments, deportation from
"You need to realise that these laws were crated 20 years back.
"A lot has changed over these years, and people need to travel for short duration for work. Many of these rules are open to interpretation by different US departments.
"We have been saying that what we need is one single service visa for people who travel for work.
"As an industry body, we will work with them. But the US needs to make its visa rules much more transparent and predictive," says Som Mittal, president of software body Nasscom.
Recently, IBM, TCS, HCL and Cognizant, too, were under the scanner of the US embassy for visa irregularities.
Under the Business Executive Programme, designed to speed up the visa process for firms who have large requirements, these firms were suspended for a few months and then reinstated.
The suspension was due to an erroneous filing of a visa application, caused by human error.
Indian IT firms earlier preferred to send Indian engineers to the US, as it was cheaper than to hire a US local.
However, the equation has changed over a few years, as salary levels in India have skyrocketed.
But some skilled employees are also needed to work on the company's site, too. Here's where the scenario is changing. Earlier, the H1-B cap used to be filled within the first few weeks.
However, the H1-B visa cap for 2011-12 is yet to be filled. According to the US Citizenship and Immigration Services, it has received only 5,900 H-1B petitions.
The application process starts from April 1 and firms who manage to get these visas can only send employees to the US from October.
One reason, according to analysts is that a lot has been left to interpretation during the visa interviews. "Take the case of B1 visa.
The criteria for the visa are not clearly defined. Ambiguities are open to interpretation for different people," says Cyrus Mehta, founder, Cyrus D Mehta and Associates.
