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19
April 2017
With the US tightening the norms for H-1B visas under the
President Donald Trump's 'Buy American, Hire American' campaign, the Indian IT
companies are bound to face disruptions by way of higher costs and even some
laying off work force back home, and the rising rupee is aggravating the
situation further for the technology export firms, an Assocham paper said here
on Wednesday. The Total Investment & Insurance
Solutions
Nearly
86 per cent of the H-1B visas issued for workers in the computer space go to
Indians and this figure is now sure to be scaled down to about 60 per cent or
even less, the paper said.
Remittances
from the US would decline, hurting the balance of payment. World Bank data
showed the US was the second largest source of remittance for India in 2015,
behind Saudi Arabia, and about $10.96 billion, nearly 16 per cent of the total
inflows, were sent to India.
The
industry chamber expects it to disturb the balance by 8-10 per cent.
As
the cost pressure would increase, aggravated by rising rupee leading to lower
realisations, the Indian IT firms may be forced to displace work force.
"In that case, the chances of layoffs are real," said Assocham
Secretary General D.S. Rawat.
He
said the IT industry apex organisations and the government need to work out a
joint strategy to deal with the unfolding situation.
In
the last three months, the Indian currency has gained by at least five per cent
against US dollar, reducing net realisations for software exporters, among
other export-oriented sectors.
According
to the Assocham paper, the reverses resulting from the tightening of the H-1B
visas would force IT giants to effect fundamental changes in their strategies
in terms of hiring, salaries, jobs, impacting employees in India too.
With
Britain already hiking the minimum wage requirement to euro 35,000 for tier II
visa immigrants, this latest move by the US will act as a definitive dampener
to the Indian outsourcing industry. The Total
Investment & Insurance Solutions
The
alternate solutions for the Indian outsourcing industry are: Investing
"near shore centres" - facilities close to the US; focus on local
hiring in America; and to work virtually, which is becoming easier with the
wider adoption of cloud services and greater digitisation, the paper said.The Total Investment & Insurance Solutions
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