The Central Government has issued fresh guidelines that aim to simplify the employment visa process so as to benefit foreign nationals working in India, in the information technology (“IT”) sector.

Highlights:-The guidelines issued on 26 April 2010 (“new guidelines”) are measures taken by the Government to counter the adverse effects of the employment visa (“E-visa”) notification of December 2009. In terms of the new guidelines, E-visa applications sponsored by qualifying Indian IT companies will be processed by the Indian missions abroad and will not be subjected to any quota restrictions.

Qualifying IT & ITeS Companies

New guidelines have identified eligible companies to mean IT and Information Technology enabled Services (“ITeS”) Companies providing business, finance and technology services. Further, the individual services have also been defined as under:

  • Business services comprise of basic voice, specialized voice, basic data, rules-based decision making (e.g. payment reconciliation), research and analytics (e.g. financial ratio analysis for corporate loan) and knowledge services (e.g., underwriting of insurance policies, risk management in retail finance, medical diagnostic services);
  • Finance and accounting services include general accounting, transaction management, corporate finance, compliance management and statutory reporting;
  • Technology services comprise nine segments viz. remote infrastructure management, application maintenance, custom application development, systems integration, IT and management consulting, embedded systems, plant engineering, product design and software product development.

Conditions for simplified procedure

The guidelines prescribe three cumulative conditions to be satisfied to be eligible for the simplified E-visa processing. These are:

  • The Indian company sponsoring the foreign national must declare that it is an IT, ITeS company falling within the definition detailed above
  • The Indian company must either be a Software Technology Park of India (“STPI”) unit, Export Oriented Unit (“EOU”), or an IT Company operating out of an SEZ.
  • The Foreign national for whom the E-visa is to be given must receive annual remuneration in excess of USD 25,000

Implications

If the application satisfies the above conditions, then the Indian missions overseas have been authorized to issue E-visa without any approval from any authority in India. The E-visa can be issued for lower of assignment duration or a period of 3 years. This can be extended for upto 5 years from the date of issue of initial visa. The application will not be subject to the normal quota restrictions wherein number of foreign nationals was restricted to 1% of the total workforce of the Indian Company or 20 (40 in specified industries) individuals, whichever is less.

However, the government has clarified that the existing quota and visa processing requirements will be applicable for individuals from PRC countries though PRC has not been defined and a clarification is expected. The guidelines relating to security confirmation issued by Ministry of Home Affairs will apply to qualifying applications referred to above.

Key takeaways

Indian IT, ITeS companies that satisfy the prescribed criteria will be able to avail services of skilled foreign nationals without any restriction on the number of such individuals who can obtain E-visa.

Source: New guidelines on Employment visa issued by Ministry of External Affairs dated 26 April, 2010

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