The National Association of Software and Service Companies said on Tuesday that the proposed legislation by the US House of Representatives to restrict the use of L1 visas by the Indian companies will affect the Indian IT industry in the long term as about 10 per cent of Indian software professionals in the US avail of L1 visas.

The bill, which was introduced recently, will prevent an employer from replacing a non-US citizen with another employer in an intra-company transfer.

This will stop the Indian companies to send employees who would work on site projects in the offices of clients.

"About seven per cent of the total L1 visa holders are Indians. We think that there will be a long term impact on the Indian software sector as well as on the US economy. The bill also has been recently introduced and will require to be passed by the House of Representatives, the Senate and a final approval from the US President would be required in order to become a law," Sunil Mehta, vice-president, Nasscom, said.

Nasscom is also working with the Ministry of External Affairs and Ministry of Communications & IT, Government of India, on this issue.

Nasscom has initiated a dialogue with various policy makers, legislators, customers to address these concerns and explain to them the benefits of outsourcing to India.

During its discussions, Nasscom has highlighted how Indian IT vendors have helped create wealth in the US economy, offer cost-effective, high quality and high productivity services, which enhance the competitiveness of the entire US economy and generate savings for American consumers.

Nasscom has also called upon its members to adhere to the new rules prescribed by the US government.

"Indian IT industry has always been following the letter and spirit of the law in adhering to the visa regulations in the United States," Mehta said.

"Following the stringent process of authentication of H1B visa applicants in the light of heightened national security concerns, there has been an increase in the visa processing periods. However, there has been no report of any discrepancy reported by the US embassy in India," Mehta said.

"We understand the concerns behind the US government's need to strengthen visa regulations. The Indian IT industry has always been following the letter and spirit of the law in adhering to the visa and wage regulations in the United States and is committed to supporting the INS," Mehta said.