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H-1B visa row: Why Infosys, TCS need to make right noises with those who matter in Trump administration

To say that Indian IT majors would deliberately cheat the US with regard to H-1B visa applications is stretching the truth, said industry experts to Firstpost. “The Indian companies that apply for large numbers of H-1B visa under the US lottery system do so because of their size and scale. It is not cheating,” said an IT analyst.

The Trump administration came down harshly on top Indian information technology (IT) companies Tata Consultancy Services Ltd (TCS) and Infosys Ltd of unfairly cornering the lion’s share of H-1B visas by putting extra tickets in the lottery system, which it wants to replace with a more merit-based immigration policy.

At a White House briefing last week, an official in the Trump administration said a small number of big outsourcing firms flood the system with applications which naturally ups their chances of success in the lottery draw.

“You may know their names well, but like the top recipients of the H-1B visa are companies like Tata (TCS), Infosys, Cognizant—they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas,” the senior official said, according to transcript of the briefing posted on the White House website.

Representational image. News 18

Representational image. News 18

Tightening H-1B visa norms

The Trump administration has been tightening norms for H-1B visa since Donald Trump became president. Trump has a poll promise to keep up to: To create more local jobs. Ever since he was elected to office, Trump has been reiterating his campaign promise of focusing on American manufacturing. "Our goal as a nation must be to rely less on imports and more on products made here in the USA," Trump had said that when he visited Boeing’s South Carolina plant in February.

Earlier in January, Trump threatened to impose 35 percent tariff on imported vehicles. He called the three US auto majors -- General Motors CEO Mary Barra, Ford Motor’s Mark Fields and Fiat Chrysler Automobiles’ Sergio Marchionne - to the White House and told them he wanted to see more auto plants in the United States.

Most of what Trump administration is putting out is smoke and mirrors and the truth of these statements is not known, said an industry veteran. “Remember what Trump said about China during his campaign days and how it all changed when China came visiting to the White house?”

Trump was indeed scathing in his speeches and also some of his tweets against China. Consider this tweet: "We can’t continue to allow China to rape our country and that’s what they’re doing. It’s the greatest theft in the history of the world.” After meeting with the Chinese president Xi Jingping, Trump softened his stance against China.

What can Indian companies do?

Trump’s style is to threaten and then get statements from the companies concerned. That is what he is hoping to by his administration naming the Indian IT firms during a briefing on the president’s executive order issued last week, said an IT analyst. Remember how he threatened Toyota with a ‘big border tax’ if they were to go ahead with the plan to build a plant in Mexico, he said.

Harish HV, Partner, India Leadership Team, Grant Thornton India LLP, is of the opinion that India should adopt a wait-and-watch policy with regard to the Trump administration. “Every one of the Indian IT firms that work in the US contribute to the US economy. They have a substantial hand in making the US what it is today,” he pointed out.

Another way of combating what Trump administration' s statements that go against Indian IT firms is for the latter to make the right noises with those who matter in that administration. Meeting with Steve Mnuchin, US Treasury Secretary, may not be the right route for India to take. Instead, "Indian IT companies should meet Trump’s son-in-law Jared Kushner and daughter Ivanka Trump – senior advisor and special assistant to Trump respectively -- who have Donald Trump’s ear", suggests Kris Laxmikanth, founder CEO & MD, The Head Hunters India, Bangalore and visiting faculty, Institute of Management, Ranchi.

Most of the first world heads of state starting with UK’s Theresa May, Japan’s Shinzo Abe, China’s Xi Jingping to German Chancellor Angela Merkel and others have met Trump since he took office in mid-January. PM Modi is meeting Trump much later either in May or July. It would have helped the Indian IT companies cause if both heads of state had met earlier, says Laxmikanth.

One way out for the Indian IT firms would be to lobby on their own with the Trump administration independent of Nasscom, says Laxmikanth, which is what the IT majors will do, he says. Another way for the IT companies would be to create jobs for locals in the US to show that they are following through what they have been saying, he says.

“The Indian technology companies have to get used to the change in visa policies and have strategies to deal with the changed political environment,” says Laxmikanth.

Updated Date: Apr 24, 2017 15:49 PM

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