New Delhi: India’s Information Technology (IT) sector is bracing for the consequences of US President Donald Trump’s proposed stricter H1B visa rules, aiming at restricting job outsourcing.
Trump has already signed an order to block entry of people, including highly qualified professionals, from seven Muslim-majority nations. According to IT companies in India, the US protectionism could spell trouble for firms such as Infosys, Wipro and TCS.
H1B is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. Technology companies, including those from India, depend on it for hiring tens of thousands of employees each year.
If the Lofgren Bill is implemented, the US companies will have to hire Americans first but if they must, for some reason, recruit foreign workers, priority will be given to the most highly paid.
Industry body National Association of Software and Services Companies (Nasscom) believes that the Lofgren Bill contains provisions that may prove challenging for the Indian IT sector.
“The specific provisions of the Bill that need to be considered are that the it does nothing to address the underlying shortage of skilled workers, which has led all companies to have a calibrated strategy of hiring locally and bridging the skills gap by bringing skilled workers on non- immigrant visas including H1Bs,” Nasscom President R Chandrashekhar said.
Increased friction
Nasscom is a trade association of Indian IT and Business Process Outsourcing (BPO) industry. Established in 1988, it is a non-profit organisation.
“Since the rationale for the administration and the legislative wing is to protect job opportunities for Americans, our strong suggestion is that they should carefully calibrate the conditions keeping in mind the skill shortage in the US. Overall, the recent moves will make the operating environment less business friendly, and increase the friction in the system in the form of delays, uncertainties, more paperwork and documentation,” Chandrashekhar added.
Nasscom has asked IT companies in America such as Apple, Google and Microsoft to lobby with Trump administration to explain that more jobs would be generated by them if they outsourced to India.
IT company Infosys feels that H1B visa restrictions will not hold because of lack of skilled workers in the US.
“There is a talent shortage in America. It is something that has to be balanced. It is not that the H1B visa employees are coming in to displace jobs. If you look at many other high-tech companies, they all hire H1B visa workers because there is an inherent shortage,” Infosys chief executive officer Vishal Sikka told media.
Not enough graduates
Likewise, IT company Cognizant laments the shortage of skilled workers in the tech sector.
“The reality is that there are not enough graduates coming out of the universities to work in the Information Technology sector in America. We are working with many universities all over America. We are already struggling to hire the right professionals,” Cognizant president Rajeev Mehta said.
IT major Infosys believes it is too early to comment on the proposed norms.
“At this point, the whole thing is very unclear. However, if the changes at the H1B visa norms happen, the Information Technology industry will surely have an impact,” S Gopalakrishnan, co-founder and former chairman of Infosys, told media.
Wipro and TCS have declined to comment on proposed stricter H1B visa rules.
“As of now, it seems US President Donald Trump is fulfilling his election promises. The IT industry is definitely little bit less optimistic. Indian companies will have to hire more locally and it is going to be difficult if such a sentiment continues. The policies hint at the fact that there is no other way but more local hiring. Indian firms have to find ways to do business with the US, a 60 per cent revenue generator for them,” Dinesh Goel, India head of IT research firm ISG, said.
