Four hours AFTER the QUOTA OPENED for H1B visas, it was filled out for the year. “The visa office is closed till the next fiscal year,” reads a board at the United States Citizenship and Immigration Services (USCIS) office. The annual limit for the controversial guest worker program through the H1B visas—which help many Indian technology professionals to emigrate—has been capped to 65,000 banning all further applications.

The USCIS has cut down its intake of foreign workers to 65000 from 195,000. Exemptions to the cap already exist for institutions of higher education, non-profit research groups and governmental research organization. But technology companies in India, who frequently use this visa to transfer their employees to work in the U.S, are in a serious fix. Since most of the big companies already have hundreds of employees working on critical missions, this new policy could tamper their workflow. On the other hand, small and medium sized companies are bearing the pinch, as the larger companies now use the smaller agencies to pick up the slack.

“Henceforth, there will be a serious monitoring within the company in promoting oversea workers,” say heads of small firms. But the haunting worry is that the larger companies, despite their visa deposits, are competing fiercely in the race for H1Bs. This could worsen the distribution model by making it disproportionate. And the fact that the small companies cannot use the L1—an intra-company transfer visa route—without having a base in the U.S might affect them drastically. The tech giants feel this wouldn’t affect their business processes, as their L1 visas are always a backup option. Satyam, for instance, has addressed this risk through a robust forecasting and forward planning process at a project/customer level in applying for visas. “We also have in place strong processes (with effective and time tested SLAs) that enable acquisition of talent locally in the U.S. itself. And also wherever possible and justified, we use the L1 visas,” says Avani Ebkote, corporate head of Satyam.

In an immediate relief to the tech firms, a recent report from the American embassy shows positive signs of increasing the number of visas to be allotted. Some senators in the U.S have supported this move, in an attempt to create a win-win feeling for both American as well as Indian information technology companies. The National Association of Software and Service Companies (NASSCOM) chairman Jerry Rao said, “The move to raise the cap on H1-B visas has essentially been spearheaded by a couple of senators in the U.S. If the proposal comes through, it would free up to 25,000 visas for foreign tech workers. While this is incremental, it will ease the pressure on Indian IT firms.”

According to Xansa India executive chairman Saurabh Srivastava, “Increasingly, the U.S. economy is becoming IT-intensive and as such, there is an increasing demand for tech workers. It’s corporate America, which is fuelling this demand for more tech workers. Obviously, the Indian IT firms will be happy if the cap is raised. Besides, at the outset, this cap on the tech workforce is wrong.”

Although the U.S. industry recognizes the need to have more professionals to service their industry, it is said that this cut down on the number of H1-B visas—to nearly quarter of its previous offerings—was a subsequent response to the September 11 incident.