TRUMP GIVES INDIAN IT SLEEPLESS NIGHTS
H1b visa crackdown is also affecting American tech companies, with hiring costs set to rise, writes Rebecca Bundhun
Like many other ambitious Indians, Ankit Dhall, an assistant IT manager in Mumbai, plans to go to the US this year to study for a master’s degree – with a dream of eventually landing a job in Silicon Valley.
But he says he’s losing sleep because of US President Donald Trump’s push for a crackdown on the visas IT firms widely use to employ Indians in America.
“I’ll be taking a loan [for my studies], so it’s a big worry,” says Mr Dhall.
“Every night when I’m going to sleep, I wonder if I will be able to clear my loans if I don’t get a visa and a job in the US.”
Since he came to power, Mr Trump has been demanding reforms of the H1B visa programme – used by highly-skilled workers in the US, including many Indian nationals in the IT sector – as part of his pledge to “Buy American, Hire American”.
The crackdown on the visa programmeme is already impacting job opportunities for Indians in the US
– a vital market for the Asian nation’s $150-billion-a-year IT industry – and driving up costs for US-based companies.
Last month, the Trump government announced a new policy that tightens procedures and means companies may need to provide more documents for hiring someone on an H1B visa. There have been further proposed changes to the visa regime, including more than doubling the minimum salary requirement for these visas to $130,000 a year, from $60,000.
“It’s a bit concerning for Indian technology organisations,” says Srividya Kannan, the founder and director of Avaali Solutions, a consulting services firm based in Bangalore, often referred to as the Silicon Valley of India because of its large number of IT firms.
“With the new policies, costs and documentation procedures are going to become more cumbersome. This may also add some red tape.”
Under the Trump government’s visa policy changes announced last month, firms will have to provide much more supporting evidence and work harder to prove that its H1B employees at third-party workplaces qualify for the visas.
Ms Kannan says moving Indian employees between companies or projects in the US is going to become much more challenging for businesses.
“Hiring of local talent in the US is likely to again impact costs,” she says.
“Indian companies have already slashed their applications.”
Such moves comes at a time when India’s IT sector is grappling with a range of challenges, including the rise of automation and artificial intelligence, and competition from other markets, including China.
Global economic weakness has not helped, while Brexit poses some uncertainty to Indian IT firms’ operations and expansion plans for the UK and the rest of Europe.
About 70 per cent of America’s H1B visas are issued to Indian nationals.
Six of the top 10 companies that use the visa programmeme are Indian outsourcing firms, including Infosys and Tata Consultancy Services, according to Forbes.
US firms, including Amazon and IBM, are also among the main companies that use the visa programme to hire workers from overseas.
Such firms will also be impacted by Mr Trump’s proposed policies.
Hiring Americans is significantly more expensive than hiring Indians, with employment experts estimating an American software engineer will cost about 40 per cent more.
Mr Trump’s stance has already had a significant impact on the recruitment of Indian IT workers in the US, according to Ajay Kolla, the chief executive and founder of Wisdomjobs, a recruitment firm in Hyderabad.
“After Trump came to power, jobs got affected, going down by about 15 to 20 per cent,” he says.
US businesses are concerned about the costs of having to hire more employees locally, which is having a negative effect on the number of new projects that Indian IT firms are taking on in the country, he says.
The situation could get worse if Mr Trump continues to tighten the H1B policies. “In the IT sector, I think jobs-wise, it is going to be hit a lot in the next year because of the Trump effect,” says Mr Kolla.
There is clear evidence Indian companies that send workers to the US have already begun the process of hiring more Americans.
Indian IT giant Infosys last year unveiled plans to hire 10,000 American employees by 2019, for example.
The effects on the lives of some Indians can already be seen.
Prathamesh Muzumdar from Mumbai completed an MBA in the US and worked there for several years in marketing research in the technology sector.
He had hoped to settle in the US permanently, but was forced to return home last year after failing to find a new job after being laid off.
“Nobody was interested to take a transfer for the H1B and most of the people who interviewed me gave me a very good reason, saying that this new Trump regime is coming with new reforms.”
He cannot imagine returning to the US while Mr Trump remains in power, he says.
Executives at Indian software company Newgen say it will be the IT services firms that heavily depend on manpower that will be most affected by changes to the visa regime.
“Our major part of business is based on licence sales, unlike IT services companies,” says Virender Jeet, the senior vice president of technology at Newgen Software.
“We have made significant investments in hiring locals for setting up sales teams in the US.”
Ajay Shah, the vice president of recruitment services at TeamLease, one of India’s biggest human resources services companies, explains that if Mr Trump’s policies continue to reduce opportunities, more and more Indians will seek jobs within India, or they will look towards markets including Europe and Canada for employment.
He thinks it will be the US firms that
Excluding Indians from the US won’t benefit India and it won’t benefit the US. I’m just keeping my hopes high ANKIT DHALL Assistant IT manager
will ultimately feel the negative impact of the visa changes, with India’s IT industry also suffering.
“My question is, how will they be able to manage IT resourcing in the US alone, with the local resources being more expensive and less in number compared to the Indian workforce?”
As a result, he thinks Mr Trump will eventually be forced to reconsider his crackdown on H1B visas.
For Mr Dhall, he is keeping his fingers crossed that the US might rethink its stance and that he will manage to secure a job there once he completes his studies.
“Excluding Indians from the US won’t benefit India and it won’t benefit the US,” he says.
“I’m just keeping my hopes high.”