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Facing visa issues, Indian outsourcers have strength in numbers

John Ribeiro | Feb. 2, 2017
Proposed regulations could still present challenges

Lofgren's legislation and other H-1B bills in the pipeline could prove to be disruptive and push up costs for IT services companies, but Gartner research director D.D. Mishra thinks it could be overcome by measures such as increasing process automation.

“The risks to the IT services sector include an increase in cost per professional, more local hiring and a disruption in service continuity, which may have a negative impact on the profitability of companies that are visa-reliant,” Mishra wrote in an email. “A potential offset, however, could be the accelerated use of technology-based solutions, such as robotic process automation and disintermediating human labor.” A number of Indian companies are already using automation to cut down on the number of staff required for routine coding tasks.

Concerns about protectionism in the U.S. have surfaced in the past, including during the Barack Obama administration. Indian IT companies have meanwhile been expanding their operations in the U.S. by setting up facilities there, or through local acquisitions.

“It is important to note that irrespective of the legislative environment, we continue to hire and invest locally. However, given the skill shortages in the U.S. and the availability of technically skilled workforce in various global markets, we also rely upon visa programs to supplement these skills,” said Pravin Rao, COO of Infosys, in an emailed reply to questions.

The company is exploring new operating models that will reduce its dependence on visas in the long term and make it a preferred employer in the U.S., he said.

Another Bangalore-based outsourcer, Wipro, has set up new delivery centers in Mountain View, Calif., and Dallas, and plans to further expand existing centers in Atlanta, Tampa, Fla., and Indianapolis, Ind., a company spokesman said. The outsourcer invested about $1 billion in U.S. technology companies over the last year.

“These localization efforts will bear fruit at many levels including reducing our dependency on visas and deepening our engagement with the local communities,” the spokesman said.

It is not likely that at this stage that Indian companies will look to buy up service providers in the U.S. just to boost their employee count in the country, Apte said. They will more likely focus on acquiring intellectual property or try to enter niche markets, he added.

But for possible bruises over visas, it seems it will be business as usual for Indian outsourcers, despite Trump.

 

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