India’s software
services sector is bracing for the consequences of US President Donald Trump’s crackdown
on immigration, which include the restrictions on so-called H-1B visas. Having
won the presidency on the promise of protecting US jobs and against moving work
offshore, Trump through his reforms restricted the flow of immigrants and
temporary labourers into the US workforce.
H-1B visa is an employment-based,
non-immigrant visa that allows US companies to temporarily employ foreign
workers in specialty occupation. Indian
IT firms and H-1B visa aspirants will be badly affected due to changes proposed
by the Trump administration. However,
this reform doesn’t affect the Indians, settled in America who therefore being
an American citizen enjoy all the benefits.
The American
authorities have raised the minimum salary from 60,000 USD to 130,000 USD per
annum with additional restrictions on the employer. And therefore, doubling of the minimum wage
applies to "visa dependent employers" who send the workers for a
short period say 1 or 2 years from India.
Thus, Indian companies have to send those people who are really worth
the minimum wages.
An opportunity
to “work onsite” and “earn in dollars” has been a big lure for Indian Techies. But
the Americans want only those specialized US workers to occupy those high-skilled
technology works and the remaining jobs to be filled by local Americans. However, there is nothing to worry about because
the local American cannot become excellent techies overnight.
The US
government have received about 250,000 applications for H-1B visas - with a
majority of them being from Indian companies. Of nearly 85000 H-1B visas
granted in 2015, 55900 visas were issued to engineers, designers, coders and
others from India. This shows that the majority of tech worker in America are
indeed no doubt Indians.
The new bill
introduced by trump in the US House of Representative, made it difficult for
the firms to grant H-1B visa as it is quite expensive. Furthermore, nearly half
of the techies are actually working in India on the American projects. And
therefore the problem is not the visa or the immigration laws. The exact
problem lies on the shortage of appropriate manipulative skills which can take
the country, workforce and economy from traditional one to a digital world.
Key Points on how the new bill on H1-B visas can
impact Indians:
1.
India's IT industry will face short-term challenges
The reform will
affect the profits of Indian IT companies in US. Because the new H-1B Reform
Bill has doubled the minimum wage requirement of H1-B visa holders from $60,000
to $130,000. This change could turn into a major catastrophe for Indian
companies and workers, as it would make it financially unviable for Indian
workers to be hired in the US. This automatically negates one of the biggest
reason for hiring Indian workers – the availability of cheap labour.
2.
Indian tech workers may face uncertain future
Due to the new
reforms, Indian IT companies will not be able to send local engineers to work
in US, for a very high salary. With the new mandated levels, Indian workers
must be paid more than the American workers, making them a costly proposition. Moreover,
it will be difficult to get them back home and make them work for the same salary.
Even when they tend to work– they will feel more dissatisfied.
3.
Results in higher operational costs for the Indian outsourcing
industry
Changes in the
H1-B visa arrangement will add immense cost pressures on IT firms. IT companies
in India that enjoy significant cost advantages by sending Indian engineers to
the US for a lower salary, are likely to be affected. H-1B programme was
initiated on premise to complement America's high-skilled workforce, but not
replace it. Unfortunately, many companies are trying to exploit the programmes
by cutting American workers for cheaper labour.
4.
Will affect Small Companies to a large extend
The restrictions
on H1-B visas, is most likely to affect small firms more than large outsourcing
firm. Since the process is expensive, small companies do not even dare to apply
for these kinds of Visa. Though the
start-ups and emerging companies dare to innovate and progress, because of the
high expense of acquiring the H1-B visa, the smaller companies tend to step
back.
Unlike other
countries like America, France, etc., there is no provision for start-up visa
and thus, the companies daring to do something new can enjoy these benefits. India's one of the biggest outsourcing
industry, Information Technology contributes around 9.5% to the country’s GDP
and employs nearly 3.7 million professionals. And due to unfavourable
developments in key markets, the industry faces difficulties on home-ground
because of higher Operational Costs.
The US
government allows upto 85,000 new H-1B visas each year but the demand is
usually higher than the supply. NASSCOM,
the industry body for software and services companies is planning to send a
delegation to the United States to negotiate and discuss on these issues.
Meanwhile, India discussed several issues, including the proposed restrictions
on H1-B visa with the US lawmakers. The
negotiators have to find an effective solution that does not hurt our economy,
technical department and Indian IT companies.
Many social media companies like Facebook, LinkedIn,
Twitter, Google, etc. have emerged to be successful in a very short span of
time. Companies are automating jobs and seeking innovative technology to remain
competitive. This kind of innovation has to be inculcated even in Indian
Companies. Consequently, India has to inject the culture of innovation.
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