Trump′s protectionist policies shake India′s IT industry | Asia| An in-depth look at news from across the continent | DW | 12.03.2018
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Trump's protectionist policies shake India's IT industry

The Trump administration's protectionist measures have unsettled the plans of many Indian IT professionals, who previously aimed at working in the US due to the prospect of higher income and elevated social status.

Raghu Srinivasan has promised to buy his wife the latest model of iPad and his daughter some chocolates when he visits the US next time. But, the mother-daughter duo needs to wait for their gifts little longer because Srinivasan's visa has been rejected more than once.

Located not too distant in the same southern Indian city of Chennai is Abirami Sundar, who recently got married. She wedded her husband hoping to obtain a "dependent visa" to travel to the US but her journey to her dreamland is also on hold as her husband did not manage to secure the coveted H1B visa.

These are not isolated cases but stories of hundreds, if not thousands, of Indians, feeling the heat of US President Donald Trump's protectionist policies stemming from "buy American, hire American" outlook.

IT workforce in India, world's largest outsourcing hub for the software industry, chiefly relies on the H1B visa program, meant for workers with specialized skillsets, to reach the US. But this has now come under close scrutiny of the Trump administration as a lion's share of H1B visas issued by the US — up to 70 percent — go to Indian nationals.

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Entangled H1B program

The process through which individuals acquire H1B visa has been significantly tightened making it more cumbersome and tedious. For example, an IT industry insider told DW that nearly seven out of 10 applications are now being sent through the dreaded request for evidence (RFEs), while in the past nearly 90 percent of the applications were approved straight away.

Though the RFE does not necessarily lead to a rejection in many cases, what it does is to extend the timeframe, create more opportunities for denials and delay the entry to the US.

In late February, the US Citizenship and Immigration Services Agency (USCIS) issued a policy memo cracking down heavily on companies trying to abuse the H1B program. In total, 85,000 H1B visas, valid for three years and extendable for another three, are doled out by the USCIS every year with about 20,000 reserved for advanced degree holders. As the demand is always higher than the allocated numbers, it triggers a lottery system and the next season is set to begin in April this year.

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Srinivasan, a senior consultant professional with an IT services giant, said: "Clearly, aspirations of going to the US have come down across our company and industry. Now, more organizations openly proclaim they are ready to seek other global talent and destinations if the Trump regime turns harder."

The senior employee said six of his team members were recently rejected L1 visa — another non-immigrant category with stricter regulations — when they were expecting at least a 50 percent success ratio. "All of them are fully qualified professionals," said Srinivasan.

He added that top-tier companies in India are now rethinking their business models by exploring possibilities of indirect agreements with American companies and investing in near-shore centers. Each company has what is known as "core-flex ratio" which is usually about 30-70 percent when it comes to recruiting local talent. And this is likely to take a big blow, added Srinivasan.

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IT services and its related business models employ about 10 million workers in India and make one of the country's booming industries since the turn of the century. More than 50 percent of IT exports from India are to the US, making it heavily reliant on Washington for its operations.

Despite the situation and a threat issued by Trump over a looming trade war, the Indian government has repeatedly underscored the importance of Indian talent in American firms and highlighted their contributions toward the US' economy.

Some industry experts are optimistic the clampdown will not impact the Indian companies much but the small firms which often misuse the H1B program will be weeded out.

Skilled migrant mobility

Shivendra Singh, president for global trade development at the Nasscom, an industry body representing Indian IT service companies, told DW: "We have seen the pressure increasing both from the administration side as well as the legislative side. We have seen many executive orders including the 'Buy American, Hire American' which came way back in March 2017."

Singh partially blamed the absence of a clear distinction in separating skilled and unskilled migrant mobility for some of the unrewarding anti-immigration policies.

A series of burdensome measures such as "the proposed changes to the H1B's lottery system, which talks about being granted on wage levels or education or changes to the spouse visa, or third-party placements looking at employer-employee relationships and asking for more documentation is quite negative and increases paperwork," underlined Singh.

"This is not to say that our companies don’t follow the right process of law. But this only increases bureaucracy without really making any difference to the value. Think of it that all these come at a time when Indian companies are hiring more than 100,000 local employees and making a substantial investment in the US," he added.

"Our only concern, or we can even say request, is that anything which is done should be done keeping in mind that the ease of doing business does not get impacted negatively."

The names of people quoted in the article have been changed to protect their identities.

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