US president Donald Trump in his inaugural Speech clearly Stated that he will “Buy American, Hire American”. Now, this statement has put Indian IT industry on edge.
For 150 billion dollar IT industry, US was the biggest export market, accounting for nearly 60 percent of its export earnings.
The industry is already battling steady growth due to big changes in the technological landscape and global headwinds like Brexit.
How are big Firms preparing themselves for the upcoming move?
Mritunjay Singh, executive director at Persistent Systems said, “From the industry perspective everybody is watching. We all expect the US president to look at a broader global environment and take a decision; we have to go beyond speeches to see what legislation is coming in.”
He further points out two key bills pending in the US for tightening the H-1B visa regime, “Do you have at least 50 percent of the employees who are local US citizens? And the other bill is about minimum wages.”
First bills state about restrictions from Hiring H-1B employees if companies employ more than 50 people, and more than 50 percent of the employees are H-1B and L1 visa holders. Another bill proposes to increase the minimum salary of H-1B visa holders to $100,000 per annum.
Mr. Singh Adds that about 48 percent of its US employees are locals and their minimum wage are close to the $100,000 mark. So persistent systems will not face much impact in terms of cost structures in the legislation come into force.
Top companies like Wipro and Infosys have said that they are boosting the US hiring to have a minimal impact. On the top of that, the IT companies are changing their business models so that they can deliver from different locations globally through innovation.
CEO of Wipro said, “Entire business model is undergoing a fundamental shift – how much you can deliver from different locations globally through innovation”.
Meanwhile, Indian IT industry body, Nasscom, is planning a visit to the US in the next few weeks to reach out to American policymakers and lawmakers.