On ability to pass the cost to the client- HCL Tech management has said in Q3 conference call that they cannot pass the cost to the client. I think the story would be more or less same for most of the other companies. Maybe they cannot pass the cost immediately, but they will build that in the cost in next projects going forward.
I think there are multiple dimensions to look at the problem. There is no denying the fact that pretty much all IT companies who are exporting to the US will be impacted, the quantum may very companywide.
If the IT company has to give a salary of $130k, they are unlikely to send many people from India to the work onsite. They would rather hire a consultant in the US for a specific assignment, and complete the job. I am not sure if it the bill impacts existing people on H1B. If it is, then it is the decent impact on US focused IT companies. If the bill aims at the new H1B visa, then it impacts may be somewhat limited.
Most of the leading companies have started hiring locally in the US for last few years.
In the medium, to long term, it could turn into India’s favour. (President )The Donald is saying American GDP to grow around 4+ from the current rate of around 2+. Due to high boom in app-based companies, salaries of IT in the US are higher level. If the economy grows at a rate which the US is aiming, then there will be high demand and there is not enough supply in the market. They could push salaries at a very high rate, and all these companies did not have a luxury of hiring people from India at a cheaper rate, which they had in last 20 years.
On a strategic level, IT is a great differentiator and companies cannot afford to delay the work, and this would be an even bigger trigger for sending more work offshore. The difference between Indian salary and US salary will become compelling to send more work offshore. Higher onsite cost may be offset by more offshore work, but it will be while before it happens.
I came across this interview of Ridham Desai on Bloomberg, who has echoed similar thoughts (45:00 minutes).