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H-1B ban beyond December could boost offshoring: Nasscom

Last Tuesday's order by US President Donald Trump, suspending the H-1B and some other non-immigrant visas, could push companies to send more IT work to centres outside the US—in India and elsewhere—Nasscom, India's IT industry lobby says

Harichandan Arakali
Published: Jun 29, 2020 02:18:53 PM IST
Updated: Jun 29, 2020 02:27:00 PM IST

H-1B ban beyond December could boost offshoring: NasscomShivendra Singh

The IT industry’s reaction to the Covid-19 pandemic has already shown that a large proportion of its four-million strong workforce can work remotely. If the visa ban extends beyond a temporary period, it may lead to more offshoring since there is a lack of local talent in the US, Shivendra Singh, a VP and head of global trade development at Nasscom, told Forbes India in an interview. Edited excerpts:

Q. How will this ban affect the Indian IT industry?
This temporary ban will impact the ability of both the US and Indian tech industries to bring in non-immigrants including H-1B visa holders to the US till Dec 2020. Given the travel restrictions in place, the impact would be seen more between October 1 to December 2020, the period when the new H-1B season commences.

The announcement by President Trump is an unfortunate move and could have a negative impact on US economic recovery. It will harm local job creation in the US. Such sentiments have been expressed by leading US associations and CEOs as well. Even though our companies have hired tens of thousands of Americans and invested billions of dollars in recent years, they, like others in the sector, utilise such high-skilled individuals—who bridge a critical skills gap—to service their US clients and make them grow.

 We should keep in mind that this is a temporary restriction and our request is to shorten the same to 90 days. Given the critical role being undertaken by tech workers during the Covid-19 recovery period, we seek exemptions for tech workers as essential workers—those who are included under US DHS’s CISA guidance. 

Q. How has the Indian IT industry prepared itself, ahead of this order (given that it was expected for some time)?
The Indian IT industry, since 2015, has seen more local hiring in the US and a reduction in numbers of H-1B visas. The top seven Indian IT firms (comprising more than 90 percent of H-1B allocated visas) for FY 2019 accounted for 6 percent of the 85,000 H-1B visas. This has been due to factors including digital transformation, the need for domain knowledge and client proximity. However, Indian nationals take around 75 percent share of the H-1B visas, which is a clear testimony to their skill set; they are hired by the US tech industry too.

The industry continues to focus on its imperative of skilling talent to ensure a future-ready workforce, and to drive innovation and technology adoption ahead of global standards. The new practices will also involve hybrid working models. Over 4 million employees of the Indian IT industry have already adopted part-remote work, proving their readiness for such challenges. This means that organisations can engage them from any part of the world and employees can continue to work remotely from any region.

Q. What is the long-term direction in which US policy on foreign workers is headed, as reflected by measures such as this latest ban?
There is still a lot of speculation as to what policy changes will come into force in a Covid-19 recovery era. While the current proclamation is in place till the end of 2020, we are aware that a set of regulatory promulgations are in the offing with the ostensible objective of making efficient allocation of H-1B visas. It is still early to predict what the implications will be. But I am confident that the rate at which the industry is transforming to cater to the new normal, the industry will find the right balance to cater to global challenges.

Q. With the Covid-19 driven contraction in the global economy, will this ban add one more reason for large US companies to offshore more work?
The global delivery model continues to evolve, and India enjoys a 55 percent market share in global sourcing. This is due to a combination of factors, including an ever-growing innovation ecosystem comprising start-ups and global capability centres and the world’s largest base for skilled talent. In case this measure extends beyond a temporary period, it may lead to more offshoring since there is a lack of local talent available. Virtually every segment of the American economy, including manufacturing, technology, accounting, medicine, among others, employs skilled workers from other countries for the innovation, productivity and expertise they bring.

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