What will the future of Indian IT industry be with regard to US President Donald Trump's latest directive on the H-1B visa issue? On Tuesday, Trump tightened the rules of the H-1B visa programme to stop its "abuse" and ensure that the visas are given to the "most-skilled or highest paid" petitioners. Since Trump took office in January this year, the H-1B visa has been a focal point of discussion and has come in for a three-pronged attack from the Justice Department, Department of Homeland Security and the United States Citizenship and Immigration Services. What will be the future of Indian IT workers in the US? A number of questions have been thrown up following Trump's latest action. Shivendra Singh, global trade development head at the National Association of Software and services Companies (Nasscom) decodes Trump's directive on the H-1B visa issue and what it means for the Indian IT sector.
Excerpts from an interview:
What does the new H-1B visa rules mean for the Indian IT industry?
The executive order that US president Donald Trump is talking about has been there for some time. In Trump’s slogan of ‘Buy American, Hire American’, our focus is on the latter. Trump has shared his views on the visa program and how the US needs to sort this issue.
There will be a change in the lottery system in order to protect American jobs. The lottery system is where every year about 65,000 applications are randomly selected from a pool of over 200,000 applications. The selected and approved applicants are granted H-1B visas. What is being proposed is giving jobs based on wage levels when awarding visas. All companies file for the current lottery system which opened for on 3 April and closed on 17 April. It was closed as the administration felt that since 199,000 applications had come in, that was enough for the lottery.
The assumption of the companies that filing more than one application will help them get more visas. The administration has said that the visa application system should be based on wage scale which will be defined and given to highest wage level first, etc.
In terms of skill sets, it is very difficult to define what a company needs. A Ph.D in computer science or a graduate who is also an Artifical Intelligence expert. How do you define who the company needs? It will be a huge challenge for a federal diplomat to define technical requirements of a company. You cannot define that in a fast paced world where technology is moving at a faster pace.
Do Indian nationals take away a large chunk of US jobs?
I would say this is a misconception. In terms of the Indian IT industry, Indian nationals get 71 percent H-1B visa of the 65,000 applications. It means that it is a clear testimony that Indian nationals have relevant skill sets needed by companies. The model followed by Indian, US and other global companies are the same. Indian nationals are hired by American companies because of the skills they possess.
Of the top 20 users of H-1B visas, 14 are given to US and French companies and only six to Indian companies. This perception that Indians take away all the jobs is wrong. Indian nationals are in demand in the US because of the skills they have. The Indian IT industry is a net creator of jobs in the US. We support nearly half a million jobs in the US, in addition to which we work with 75 percent of Fortune 500 companies. A lot of them being US companies, we help them grow and create jobs in the US.
Indians, US and other global companies follow global delivery models. All hire locally. The US Department of Labour estimates that there will be about 2.4 million unfilled STEM (Science, Technology, Engineering, Mathematics) jobs by 2018. Of these 50 percent will be in IT and ITes-related fields. This skill gap is bridged by bringing in skilled people on H-1B visa by Indian, US companies and the rest alike. It is this team of talented professionals that make Corporate America successful.
What does Indian IT sector have to worry about since Trump has asked for the various government departments to ‘suggest reforms’?
We will have to see the fine print and how it is formulated. There are regional wage differences in the US. A professional with the same qualifications and years of experience will be paid differently in the Silicon Valley and any other state in the US. The regional variation in salaries will have to be looked to. A number of changes that are being proposed will also require legislations.
Will the insistence of hiring locals have detrimental impact on the Indian IT staff? How much will this decision impact the bottomlines considering the sector is already faced with multiple challenges?
The fact is Indian companies are looking at hiring locally. Some Indian firms have spoken about creating local training centres to ensure that they are able to optimise local hiring. It is not cheap to bring H-1B employees. It costs the company $10,000 per person on a H-1B visa and there is a lot of paperwork that goes into it. Staff are taken on H-1B visas to bridge skill gaps in the US and this has worked successfully for the clients, too. We are fine with any moves to adjudicate and investigate H-1B visas as long as the rule is applied universally to all countries.
What will happen to existing Indian IT staff who are posted in the US?
They will continue to be there.
How does Nasscom propose to safeguard the sector and also comply with Trump government’s suggestions?
We were there in February-March and met Congress, administration and people across board like stakeholders and continued to highlight the changes and value proposition and the roles played by H-1B visas. We also spend a lot of money on Corporate Social Responsibility initiatives to promote skill learning. If the bilateral trade is US $100 billion and has to go up to US $500 billion, technology has to play an important role which is acknowledged by both India and the US. We must have a level playing field.
Updated Date: Apr 20, 2017 17:46 PM