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New Delhi , July 22

THE backlash in the US against outsourcing will not have any impact on the fortunes of Indian software industry but margins of technology firms are under pressure due to falling prices and increasing costs, the National Association of Software and Services Companies has said.

"The anti-outsourcing movement has not gathered steam and even if all those pending Bills were to become laws, it will not impact us because the share of the US government work in our exports is less than one per cent," said Mr Sunil Mehta, Vice-President of Nasscom, here on Tuesday.

He was talking to the media after a recent visit to the US.

Mr Mehta said the Indian industry should be more concerned about profits this year as escalating expenses and severe undercutting were eroding margins.

"Margins are likely to decline this year. Competition on price is very high... older deals are being renegotiated. Cost of people and marketing are going up," he said.

On the issue of visa restrictions, Mr Mehta said the decision to bring down the number of H1B visas to 65,000 from October this year would not have much impact as the country annually needed only about 25,000 visas every year.

"Also, offshore work is going up, which means that you need lesser number of visas," he said.

Mr Mehta, who regularly interacts with US politicians and policy makers on the issue of outsourcing, said there was, nevertheless, growing concerns in US about the widening trade deficit between India and the US.

Though India does import high-tech equipment and software products from the US, most of it is invoiced out of the Asia-Pacific region.

Also, the industry now needs to take up more community development programmes in the US.

"We are a $10 billion industry today. We now need to engage more with local communities, say by recruiting local people. Our large companies have, in fact, stepped up local hiring," Mr Mehta said.

Nasscom, he said, was also planning to prepare a blueprint for creating a professional services visa in lieu of the existing visas.

"It will take some 3-6 months for us to do this," he said.

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