US mid-term results may boost IT jobs in Indian IT sector

The US mid-term elections have changed the sentiment in the technology industry. With the US Congress coming under the Democrat’s control, dynamics for the industry is all set to change. Since the last two years under the Trump administration, Indian IT industry has faced a lot of difficulties. Trump administration has brought in several restrictive measures with respect to immigration of professionals. For instance, the H-B visa applications now require a fee of $100,000 from the applicant.

Recently, most major Indian IT firms including TCS, Infosys, Wipro, HCLTech have seen suspension of their PERM (Permanent Labour Certification) programme. Similarly, undue delay has been crept in visa processing in the last two years. Not only that, the Trump administration has gone after the Green Card entry of foreign citizens by asking the applicant to apply for Green Card citizenship from their native countries. These measures have directly impacted the Indian IT firms and Indian professionals.

As Indian professionals form a significant chunk in the American technology firms including Indian ones, these measures have been largely seen a move targeting India in particular. And the outcome is also not pleasant. Due to visa problems and layoffs, more than 30,000 Indian professionals have returned from the US to India in the last two years, reports pointed out.

Apart from Trump’s tirade against Indian IT companies, AI (artificial intelligence)-led disruption has also played its role in employee displacement. Trump has supported the unbridled growth of AI and his administration has done nothing when lakhs of workers in the US lost their jobs owing to AI-led automation.

However, things are likely to change as Democrats take control of the US congress. Most experts see visa curbs easing in coming months. Moreover, no new restrictive measures will be difficult to implement amid Congressional opposition.

This definitely brings good news for the Indian IT industry. Most experts see some kind of regulations coming in the space of AI due to large scale job losses in the US. If that happens, this will definitely play out in Indian IT industry’s favour. Currently, around 5-6 per cent of revenue is coming from the AI space for large Indian IT companies.

It means the AI-led pricing pressure is heavy and the revenue growth remains subdued. If the pace of adoption of AI slows down, this will help Indian IT companies to adjust with the pace a lot better.

As an outcome, the slide in revenue growth rate will be lesser with protection of operating margin. From employment generation perspective, Indian IT industry will also gain if AI adoption slows down.

In recent quarters, the pace of job creation has slowed down among tech startups, Indian IT companies and GCCs (Global Capability Centres). The driving factor behind such slowdown is mostly attributed to AI-led automation. So, if the AI growth slows down, Indian IT industry will find more time to adjust. In addition, if visa curbs are eased, not many Indian professionals will not come back from the US.

Currently, the job market in the IT industry has turned intensely competitive because many high-skilled professionals are coming back to India due to visa problem or job losses. If this trend slows down, it will be overall positive for the Indian IT employees. Moreover, several IT professionals from India have gone

to the US through H-1B visa route and have turned into very successful professionals. If the visa curbs on H-1B goes away, then the American dream may find some wings again.

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The Hans India