Trump 2.0: The Indian IT sector may need to re-evaluate its US-centric model

livemint.com:

Subscribe to enjoy similar stories. The US has been the largest market for India’s IT services industry for decades, with companies like HCL, Infosys and TCS providing outsourced services to American firms across sectors. About 55% of India’s IT sector revenues come from that region.

However, a second term in power for Donald Trump in the US raises new concerns for this industry. Among these are changes in America’s H1B visa programme, potential tariffs and other regulatory shifts. During his first presidency, the Trump administration made substantial changes to the H1B visa scheme, which is the lifeblood of the Indian IT industry’s operations in the US.

H1B visas allow skilled foreign workers, particularly in the tech sector, to work in the US temporarily. Indian IT firms heavily rely on these visas to send skilled talent from India, filling in-demand roles at client sites across the US. But Trump’s policies included tightening the eligibility criteria, raising the wage-floor for H1B workers, and even suspending the issuance of new H1B visas during the covid pandemic.

These changes made it more difficult and costly for Indian firms to deploy their employees on US soil. These policies also meant higher operational costs and a slowdown in visa approval, thus disrupting project timelines. Many companies were forced to raise their hiring of US nationals, driving up labour costs significantly.

The second Trump term could see the reinstatement or further tightening of these policies, putting pressure on Indian firms to cut reliance on H1B visas. Under Trump 1.0, Indian nationals applying for employment-based green cards in the US faced an overwhelming backlog. According to a Congressional Research Service report, due to