Trump's new order: Indian IT sees red as H-1B visa window gets smaller

Analysts say the impact on Indian entities would not be immediate

 

An executive order signed by US President Donald Trump on Wednesday (Indian time) to protect American industry, has also targeted Indian information technology services firms, who depend on H-1B visas to send engineers to work on projects to the US. 

Trump has directed his top administration officials — the Secretaries of State, Labor and Homeland Security along with the Attorney General — to suggest reforms, so that the H-1B visas are given to the most skilled or highest paid beneficiaries. 

The move by Trump will help Silicon Valley-based entities such as Google, Facebook and Oracle to take advantage of the programme to get more engineers from India to work on projects back home. At the same time, it is expected to hurt outsourcing companies majors here, such as Tata Consultancy Services (TCS), Infosys and Wipro, which traditionally have used the H-1B visa programme to send engineers to work on projects at customer locations in America. 

This has riled the National Association of Software and Services Companies (Nasscom), which says there is a campaign to discredit the Indian services sector and the move would hurt the American economy, as the US faces a shortage of computer engineers. It would benefit only Silicon Valley companies at the cost of the rest of America.

“Regarding the concept of reorienting the H-1B lottery to be a system that prioritises the “most-skilled or highest-paid” visa applicants, the (US) Administration needs to be careful about unintended consequences,” it stated.

“Using salary levels as the metric is not necessarily the best indicator of benefits to the US economy. And, unless such a system reflects variations in wages in all parts of the US, it could advantage certain regions such as Silicon Valley over other regions of the US.” 

TCS, this country’s largest software exporter, says it has reduced the number of visas it has applied over the past few years, and has several local development centres in the US, hiring local engineers.

“We have to watch what the visa issues are. Are they going to be constraints for having the right people on projects? We have taken a view of this and our dependency on visas has been reducing. Our strategy is to move to a regime where our operating model should be visa-neutral,” says N G Subramaniam, chief operating officer at TCS.

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Note ban idea itself is wrong, don't blame execution: Rajiv Bajaj

Bajaj Auto's total domestic sales were down 16% to 1,35,188 units

 

LATEST NEWS | Peeved at the hurdles being faced by his company to launch its quadricycle in India, industrialist Rajiv Bajaj on Thursday said stifling of innovation by regulatory agencies will turn Made In India into Mad In India, taking potshots at the Centre’s flagship manufacturing initiative.

Stating the quadricycle is being sold across countries in Europe, Asia and Latin America, the managing director of Bajaj Auto wondered why a vehicle, which is cleaner, fuel-efficient, safer and whose benefits are as “obvious as daylight”, is facing troubles.

With the adverse impact of demonetisation continuing to hamper two-wheeler sales, Rajiv said the idea of demonetisation itself was “wrong” and it is incorrect to blame only the execution side of it.

“If the solution or the idea is right, it will go like a hot knife through butter. If the idea (demonetisation) is not working, don’t blame execution I think your idea itself is wrong,” he said at the annual Nasscom leadership forum in Mumbai.

The ban on 86 per cent of the total currency worth Rs 15.55 lakh crore in circulation impacted economic activity across sectors with the consumption-driven ones being the most affected. Notably, the two-wheeler sales are yet to recover from the impact of demonetisation and industry data releases over the past two months have been showing a slump.

Bajaj Auto recently said the company’s total domestic sales in January dipped 16 per cent to 135,188 units from 161,870 units sold during the same period last year.

Based on data provided by the Society of Indian Automobile Manufacturers, two-wheeler sales stood at 1,243,251 units in November, compared with 1,320,552 units during the corresponding month last year. 

Rajiv said individualisation and uniqueness is important to stand out. “We are able to deliver 22 per cent earnings before interest, tax, depreciation and amortisation (Ebitda), which is double the industry standards, which means there is something unique. Something that is good for Infosys may not be good for Tata Consultancy Services, especially in recent times.”

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