Anticipating a more protectionist U.S. technology visa program under a Donald Trump administration, India’s $150 billion IT services sector will speed up acquisitions in the United States and recruit more heavily from college campuses there, Reuters reported.
Indian companies including Tata Consultancy Services (TCS), Infosys and Wipro have long used H1-B skilled worker visas to fly computer engineers to the U.S., their largest overseas market, temporarily to service clients.
Staff from those three companies accounted for around 86,000 new H1-B workers in 2005-14. The U.S. currently issues close to that number of H1-B visas each year. President-elect Trump’s campaign rhetoric, and his pick for Attorney General of Senator Jeff Sessions, a long-time critic of the visa program, have many expecting a tighter regime.
“The world over, there’s a lot of protectionism coming in and push back on immigration. Unfortunately, people are confusing immigration with a high-skilled temporary workforce, because we are really a temporary workforce,” said Pravin Rao, chief operating officer at Infosys, India’s second-largest information technology firm.
While few expect a complete shutdown of skilled worker visas as Indian engineers are an established part of the fabric of Silicon Valley, and U.S. businesses depend on their cheaper IT and software solutions, any changes are likely to push up costs.
And a more restrictive program would likely mean Indian IT firms sending fewer developers and engineers to the United States, and increasing campus recruitment there.
“We have to accelerate hiring of locals if they are available, and start recruiting freshers from universities there,” said Infosys’ Rao, noting a shift from the traditional model of recruiting mainly experienced people in the U.S.
“Now we have to get into a model where we will recruit freshers, train them and gradually deploy them, and this will increase our costs,” he said, noting Infosys typically recruits 500-700 people each quarter in the U.S. and Europe, around 80 percent of whom are locals.
Trump’s election win and Britain’s referendum vote to leave the European Union are headwinds for India’s IT sector, as clients such as big U.S. and British banks and insurers hold off on spending while the dust settles.
In India’s IT hub of Bengaluru and the financial capital Mumbai, executives expect a Trump administration to raise the minimum wage for foreign workers, pressuring already squeezed margins.
Buying U.S. companies would help Indian IT firms build their local headcount, increase their on-the-ground presence in key markets and help counter any protectionist regulations. Indian software services companies have invested more than $2 billion in the United States in the past five years. North America accounts for more than half of the sector’s revenue.
“We have to accelerate acquisitions,” said Rao at Infosys, which in the past two years has bought companies including U.S.-based Noah Consulting and Kallidus Technologies.