The difficult immigration policies established by Donald Trump’s administration have started affecting Indian IT companies.
As per Kotak Institutional Equities Research released on the 20thof November, there has been a notable rise in the amount allocated for subcontracting between July and September this year.
Kawaljeet and Sathish Kumar explained in the report, that subcontracting is a short-term strategy employed to cover-up gaps in supply which were to be occupied by workers with H-1B visas or offshoring, so as to prevent margins. As the number of H-1B workers drop, companies resolve to other means of filling the gap.
Over the years, Indians have been known for patronizing the US H-1B visa program, and this program has recently been placed under strict scrutiny. The eligibility requirements for the visa have been raised, the procedures made more complex, and the selection process is stricter. Trump’s administration has also made improved efforts to check fraudulence in the visa procedure.
A Lasting Solution
Indian IT Firms have drifted to local employment as a lasting solution to the current issues it faces. However, this seemingly good panacea is more difficult to implement than it seems.
It has been noted that local aptitude is scarce and that might lead to greater issues. This is clearly visible in the increase in attrition numbers, thus making the situation more complicated.
Companies now resort to hiring workers from countries around the US. Companies with a presence in Mexico and Canada can leverage the TN visa to send workers to the United States.
H-1B vs TN Visa
Applying with a TN visa is cheaper and faster than H-1B visa. It also has the advantage of no stipulated application deadline, no yearly quota, and an indefinite renewal system.
Within the last one year, there has been a major upward shift in the number of people from Mexico that have received TN visas. This is a strong pointer to the fact that IT companies may permanently adopt this strategy as a means to meet the demands in the US.
For instance, Hexaware is adopting this strategy. According to the CEO of the Mumbai-based IT-BPO firm, they already have 500 people in Mexico there, and there is a chance of sourcing talents locally and relocating them to the US if need be.
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