Outsourcing curbs may adversely affect the US economy, says Nasscom

US President Donald Trump has said in no uncertain terms that he will be following a ‘Buy American, Hire American’ policy going forward. This means that there could be curbs on hiring foreign nationals or outsourcing jobs. In the software sector, that could have an adverse impact on the US economy, according to the National Association of Software and Service Companies or Nasscom.

According to Nasscom, which is scheduled to be taking a delegation to the US in February to reach out to the new US administration under Trump, the US lacks high-skilled workers needed for work in the software and services segment.

Speaking to The Hindu, R Chandrasekhar, president of Nasscom, said that this industry requires high-skilled workers which are not available in the US . “If the agenda of creation of jobs needs to be pursued, we feel that current windows will need to be kept open to get the requisite skilled workers,” said Chandrasekhar.

Chandrasekhar further added that in the US, the only job creation engine is corporate America. To ensure that it stays globally competitive and improves productivity, software services are needed and for these services to function smoothly, high-skilled professionals are required. This is made more clearer by the fact that over 60 percent of Indian IT industry’s $108bn export revenue comes from US companies.

According to Chandrasekhar, the delegation visiting the US next month will highlight and share information with the new US administration on direct jobs created by Indian IT companies in the US, and contribution of Indian IT firms in making the US economy competitive. He said that according to data available, Indian IT companies have created 4.11 lakh jobs in the US of which 1.5 lakh are direct employment. Besides job creation, Indian IT industry has also contributed to the US economy in terms of tax payment, social security outgo and CSR activities.

To make his point even clearer, Chandrasekhar quoted data from an Indian IT company which tried hiring in the US. Out of the 4,000 people interviewed only about 20 could be hired, facts which have been shared with the relevant authorities in the US. This is not to say that US does not have skilled workers, but they are not necessarily qualified with the skills that are needed.

Nasscom further pointed to the fact that over 50 percent of the students pursuing STEM (Science, Technology, Engineering and Maths) courses in the US universities are foreigners. Nasscom also alleged that Indian IT companies have to pay higher visa fees if they hire foreign professionals, as compared to a US company doing the same. A little over 15 percent of the H1-B visas are issued by Indian companies.

The matter is no longer limited to Nasscom, but even IT Minister Ravi Shankar Prasad has weighed in on the matter. “..if certain issues come (up), the matter will be taken up at the Government-level where, the IT Ministry, Ministry of Commerce, and Ministry of External Affairs…, all the three have to work in coordination,” said Prasad. He also pointed out that between the 2011-15 period, Indian IT industry had paid over $20bn in taxes.

The issue is certainly a tricky one to resolve, as both the countries need each other in this globalised world. It remains to be seen how receptive the new US administration will be with the Indian IT delegation which Nasscom is planning to take to the US next month.