Indian companies including Tata Consultancy Services (TCS), Infosys and Wipro have long used H1-B skilled worker visas to fly computer engineers to the US, their largest overseas market, temporarily to service clients.
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“The world over, there’s a lot of protectionism coming in and push back on immigration. Unfortunately, people are confusing immigration with a high-skilled temporary workforce, because we are really a temporary workforce,” said Pravin Rao, chief operating officer at Infosys, India’s second-largest information technology firm.
While few anticipate a complete closure of skilled worker visas as Indian engineers are an established part of the fabric of Silicon Valley, and US businesses depend on their cheaper IT and software solutions, any changes are expected to see a rise in costs.
“Now we have to get into a model where we will recruit freshers, train them and gradually deploy them, and this will increase our costs,” he said.
Trump’s election to presidency and Britain’s choosing to leave the European Union will help move India’s IT sector higher, as clients such as big US and British banks and insurers hold off on spending while the dust settles.
In India’s IT hub of Bengaluru and the financial capital Mumbai, executives expect a Trump administration to raise the minimum wage for foreign workers, pressuring existing margins.
Acquiring US companies assists Indian IT firms in constructing their local headcount, increase their on-the-ground activity in key markets and help counter any protectionist regulations.
“We have to accelerate acquisitions,” said Rao at Infosys, which in the past two years has bought companies including US-based Noah Consulting and Kallidus Technologies.
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The chief executive of Tech Mahindra, C.P. Gurnani, stated that his firm, which bought network services management firm Lightbridge Communications Corp two years prior, is currently searching for more US acquisitions, specifically in healthcare and fintech – financial technology firms that are disrupting traditional banking services.
Offshoring and Automation
In a broader shift from labor intensive onsite projects, Indian IT firms are also turning to higher-tech services such as automation, cloud computing and artificial intelligence (AI) platforms.
Infosys CEO Vishal Sikka says he has kept automation and AI as growth drivers his primary focus since 2014. “The AI platform is 5-6 per cent of our revenues,” he told Reuters. “Three years ago, it was zero.”
“The ‘Plan B’ would be to accelerate the trend … to reduce their reliance on people and increase their focus on delivering automation, leveraging the cloud for their clients,” said Partha Iyengar, Gartner’s head of research in India.
- Photograph of a U.S. Department of Homeland Security logo.: desi-compile