Indian IT sector is heavily reliant on US for its business. India’s IT outsourcing industry is worth
around $108 billion, as per the National Association of Software and Service Companies. Silicon
Valley’s biggest companies, including IBM, Apple, Microsoft, Google, and Amazon, import a
sizable amount of talent from India. Infosys, Cognizant, Wipro, Accenture, TCS, and Tech
Mahindra are the biggest beneficiaries of the US H-1B work visa program.
Recent developments by the Trump’s administration have aimed at reducing migration of
workforce in US. With their aim of ‘America First’, the Congress passed bill that puts certain
restrictions on the selection process of the beneficiaries of the work visa program. It will now be
very costly for companies to import outsiders for IT jobs. There are regulations that also reduce
and limit the number of people who’ll be granted work visa for US. This has sent shock waves in
the entire global IT industry, especially India.
If and when the restrictions come in enforcement, and are successful in US administration’s
objective of keeping majority of skilled professionals from coming to US for work, lakhs of
Indian IT jobs will suffer directly and indirectly. Speculations have already caused massive
restructuring drives in many Indian service based tech giants like Infosys, Tech Mahindra, and
TCS. A string of layoffs is expected to continue for at least next two years.
The announcement has led to big unrest among the stakeholders in India. There has been a huge
public outcry. NASSCOM and the Ministry of External Affairs in India have already took some
steps to discuss with trump government how US and Indian IT industries are interdependent on
each other and the regulations would hurt both the economies.
IT companies in India that are major exporters of IT services are taking pre-emptive measures to
tackle the impending fall in demand of work for them. Companies are looking at alternatives to
survive. Some industry experts point that this decision, in fact, could prove to be a boon for
Indian IT sector which would now shift its focus on core development of software products
instead of just providing services to US based clients. This would further lead to enhancement of
IT training in India.
American IT companies that import a large number of Indians will have to look for employees
within US for software. This direct loss of jobs to Indians living in US will also cause rippling
effects in India’s domestic IT industry. But the problem isn’t just limited to India; many firms in
US might have to shut down completely as they cannot afford to continue in operation by hiring
expensive American workforce. The bigger question is what happens to the vacancies created in
US. Either the companies would have to shift their entire operations in some other country or
might have to hire Americans for the jobs. The former is any a overhauling process which hurts
Americans more than anybody else. The latter is too difficult to be accomplished. In reality
American education system is not producing as many computer science engineering
professionals as demand in the market. Over the decades, there have been a flat percentage of
American graduates specialising in computers and software domains. On the contrary there is
abundance on Indian, Chinese and South Korean students graduating in the subject. Unless US
becomes self sufficient in IT skills, this nationalistic sentiment isn’t going to do it any favour.
Companies have started looking out for expansion in European and other pacific nations,
foreseeing impending uncertainty in US rules and regulations. IT job placements from colleges
have observed a significant downfall in numbers, both in India and Indian students in US.
Students across the globe who dream to pursue higher education in US are also considering
education opportunities in European and Canadian universities.
There is no denial that the Indian IT industry and the companies in US have been hurt a lot by
new regulations. Dependency is mutual and it this sudden wave of jingoism in US might throttle
survival of both the industries in this era of globalisation. How this turns out in long term is yet to
be seen.