In­dian IT firms may get respite as Democrats win

Any change in visa rules by Trump ad­min­is­tra­tion to face stricter scru­tiny


With Democrats win­ning a ma­jor­ity in the House of Rep­re­sen­ta­tives, in­dus­try ex­perts ex­pect some checks and bal­ances in fu­ture im­mi­gra­tion poli­cies though it may not bring sig­nif­i­cant shift in the US Ad­min­is­tra­tion’s stance on cur­rent visa rules.

Ac­cord­ing to se­nior sources in the In­dian IT in­dus­try, with Democrats hav­ing an up­per hand in the US Congress, Don­ald Trump ad­min­is­tra­tion will find it dif­fi­cult to come up with any fu­ture leg­isla­tive changes with re­gard to visa reg­u­la­tions.

“There will be checks and bal­ances be­cause if you need new visa reg­u­la­tions, the Trump ad­min­is­tra­tion will re­quire sup­port of the House. So, the ad­min­is­tra­tion can't do what­ever it wants,” said V Balakr­ish­nan, chair­man of Exfin­ity Ven­tures, and a for­mer board mem­ber and chief fi­nan­cial of­fi­cer at In­fosys.

The Trump ad­min­is­tra­tion has come up with many changes in the visa rules since tak­ing over the pres­i­dency, mak­ing it dif­fi­cult for In­dian IT ser­vices firms to man their US cen­tres with In­dian en­gi­neers for ser­vic­ing clients.

Apart from rais­ing the cost of H1B visa ap­pli­ca­tions, pro­cess­ing of both H1B visa and Green Card has slowed down by the cur­rent US ad­min­is­tra­tion.

“The re­al­ity is the US doesn’t have enough ta­lent to feed the IT in­dus­try. Th­ese are all po­lit­i­cal rhetoric. But, (at the end of the day) eco­nomic re­al­ity is much more im­por­tant than po­lit­i­cal noises," Balakr­ish­nan added.

The US Cit­i­zen­ship & Im­mi­gra­tion Ser­vices (US­CIS) has a pro­vi­sion for 65,000 H1B visas a year in the gen­eral cat­e­gory and an­other 20,000 for ad­vanced de­grees.

In­dian IT ser­vices play­ers, one of the largest ap­pli­cants for the H1B visas, have wit­nessed a drop in num­ber of ap­pli­ca­tions with the US ad­min­is­tra­tion’s em­pha­sis on lo­cal hir­ing.

How­ever, IT firms are strug­gling to man their projects in the US de­spite their lo­cal­i­sa­tion ef­forts due to short­age of STEM (sci­ence, tech­nol­ogy, en­gi­neer­ing and math­e­mat­ics) ta­lent.

“The Trump ad­min­is­tra­tion has made sev­eral changes in im­mi­gra­tion rules through ex­ec­u­tive ac­tion, where they didn't have to go to the Congress for a vote. So, I don't think, this demo­cratic bal­ance is go­ing to help busi­ness im­mi­gra­tion in the short term," said Poorvi Chothani, founder and man­ag­ing part­ner at LawQuest, and pres­i­dent, Indo-Amer­i­cans Cham­ber of Com­merce (West­ern Re­gion) who spe­cialises in im­mi­gra­tion laws.

“The win for Democrats can cre­ate some re­sis­tance but I don't know how suc­cess­ful they will be against the cur­rent style of chang­ing things," she said.

In the sec­ond quar­ter of the cur­rent fis­cal year, many large and mid-tier IT ser­vices firms have flagged up con­cerns with re­gard to non-avail­abil­ity of lo­cal ta­lent in the US, lead­ing to dis­rup­tion in project ex­e­cu­tion apart from a rise in sub-con­tract­ing cost. For ex­am­ple, the coun­try’s sec­ond­largest IT ser­vices com­pany, In­fosys, saw higher on-site costs as well as at­tri­tion in the The Don­ald Trump ad­min­is­tra­tion wants to make changes in the ex­ist­ing H-1B pro­vi­sions for it to play a bet­ter role in at­tract­ing highly skilled for­eign work­ers as op­posed to the what it has now evolved into an "out­sourc­ing" role, the White House said on Thurs­day. The H1B visa, pop­u­lar among In­dian IT com­pa­nies and pro­fes­sion­als, is a non-im­mi­grant visa that al­lows US firms to em­ploy for­eign work­ers in spe­cial­ity oc­cu­pa­tions that re­quire the­o­ret­i­cal or tech­ni­cal ex­per­tise. The tech­nol­ogy com­pa­nies de­pend on it to hire tens of thou­sands of em­ploy­ees each year from coun­tries like In­dia and China. The US is plan­ning to re­vise the def­i­ni­tion of spe­cialty oc­cu­pa­tions un­der H1B visas as well as the def­i­ni­tion of em­ploy­ment un­der this for­eign work visa cat­e­gory, pop­u­lar among In­dian com­pa­nies. Such a move, which is part of the Uni­fied Fall Agenda of the Trump ad­min­is­tra­tion will have a detri­men­tal im­pact on the func­tion­ing of In­dian IT com­pa­nies in the US and also small and medium-sized con­trac­tual com­pa­nies in the IT sec­tor, which are mostly owned by In­dian Amer­i­cans.

sec­ond quar­ter. Hex­aware, a mid-sized IT ser­vices com­pany, said it could not ful­fill clients’ de­mands in the US as the com­pany didn’t have enough num­ber of em­ploy­ees with the US visa.

It also said get­ting sub­con­trac­tors in a short no­tice was also a chal­lenge. Even Wipro, which has a sig­nif­i­cantly higher per­cent­age of lo­cal em­ploy­ees in the US, saw its on-site at­tri­tion rate go­ing up.

“I would say the mid-term elec­tion is not go­ing to have any pos­i­tive or neg­a­tive im­pact on the present reg­u­la­tions. Be­cause, th­ese are not new reg­u­la­tions but are ad­min­is­tra­tive ac­tion, where the cur­rent pain is," said Vi­neet Na­yar, the for­mer CEO of HCL Tech­nolo­gies & founder chair­man of Sam­park Foun­da­tion.

Pub­lic opin­ion on H 4 visa

The Trump ad­min­is­tra­tion has as­sured law­mak­ers and the Amer­i­can cor­po­rate sec­tor that the pub­lic would get an op­por­tu­nity to re­spond to its pro­posal of re­vok­ing work au­tho­ri­sa­tion to H 4 spouse visas af­ter they raised their con­cerns over the move, which will im­pact thou­sands of In­di­ans.

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