In an interview with ET Now, R Chandrasekhar, Nasscom, says while India accounts for 70% of US H1-B visas, Indian IT companies account for less than 15% of the visas but definitely the move on green card applicants will impact India.
What is your view on the latest proposal from the Trump government on H1-B Visa holders turning green card applicants? How prepared is Indian IT as a sector to handle a situation wherein almost five lakh Indians are going to be perhaps sent home?
This is one more in a series of steps which the US has been taking in the past one year to slowly tighten the entire regulatory regime around visa -- whether it is in terms of raising the fee or imposing more restrictions. Essentially what they are now saying is that in the past when visa holders applied for green card and the application was accepted, then the extension of the visa was automatic. But now they have declared that the adjudicating official can decide not to extend it which basically means that the person would be out of a visa status and would have to return because there would not be any valid H1 visa and there would not be a green card. But having said that, this is only enabling provision. It is not as if tomorrow morning, all of them will be denied an extension and would be asked to go home.
The core of the problem is the shortage of skills in the US and if half a million Indian visa workers, that too high skilled workers and mind you this is not just IT, this is also medical and a lot of other skilled professionals also. The biggest damage would be first to the US economy, and of course obviously India would also be impacted the most because 70% of H-1B visas are taken by Indians. Indian IT companies actually account for less than 15% of the visas. These are some of the background numbers that we need to keep in view.
It is true that this is not the first time that there has been a fear around H-1B visas. Almost every day and every month, under the Trump administration, this has been a big overhang for Indian IT as a sector. What more can Indian IT companies do because they are already increasing local hiring, they already have MOUs going with local universities as well. What more in terms of tools do they have at their hands to tackle a situation like this?
IT companies have been battling many fronts in the last one year. I would say that the global economy and the global polity has thrown everything possible at the industry in terms of problem. There have been political issues for example Brexit, Trump coming into office and so on. Economically the global economy has been sluggish over the past year. A lot of the emerging economies fell off the chart and growth in Japan was really not picking up.
All of these issues have been there. The most important aspect was technology development which actually made automation more common but most important companies were being asked to deliver not technology services but business transformation services. All of these required massive adjustments by the industry and political and economic aspects and the visa issues also were only one of them.
All these factors and not necessarily even the most important issue. The industry has proved its resilience because in spite of all of these problems coming together in the same year, we had delayed even our projection by three months the first time ever because of these uncertainties but still the industry grew at 7% to 8%.
In 2018, we definitely see a positive sign. Global economic growth has picked up. US economy in particular has strengthened considerably. US interest rates have hardened which impacts investment by the BFSI segment and accounts for a large part of the industry's turnover in the US.
All of these are positive aspects and since the challenge in the US is the lack of skilled workers and none of these measures address that issue. So, if people cannot go there, the work will have to be moved out and we will see this settling into some equilibrium.
I do hope that this will work in the interest of both India and the US economy as well.
The onus of skilling has always been on the companies per se in any case and at a time like this, do you think IT as a sector can afford to spend more on skilling labour for a good three to six months because this is not a one-day training that we are talking about?
As far as the IT sector is concerned, companies cannot afford not to spend on skilling. It is the other way round. In fact, because every day you fail to upskill, whether you are an employee or a company, you are in one sense declining and if in a year or two, the skills have not been substantially upgraded, then pretty much you can fall off the charts.
So it is not an option, it is not a preference or a priority it is a must-do for every company. In fact, both at the individual company level and at an industry level, at Nasscom, the Sector Skill Council is in the process of undertaking the most massive re-skilling and up-skilling exercise ever which will not only impact our industry but will have global ramifications because we account for a significant percentage of skilled workforce in many countries.
Soon we are going to be seeing the earnings as well from IT majors. What is the future of IT looking like at a time when the world is just becoming so insular?
We have to recognise that there are two opposing and very strong forces at work; number one is the negative force of anti-globalisation and protectionism which is becoming stronger and economies are becoming a little more insular and to a limited extent, xenophobia is also on the rise. To that extent,
it is impacting even temporary movement of skilled workers which we believe is a trade issue and not an immigration issue.
That is a strong negative force; but on the other hand and moving in exactly the opposite direction is the unstoppable and irresistible force and power of technology, which is increasingly putting all of these issues beyond the control of individual governments and therefore businesses are able to find ways to overcome some of these man or government made barriers by resort to technology, after all the entire growth of the IT industry happened only because it was possible through technology to get work done in a place different from where it needed to be ultimately delivered.
This will continue and with the rise of artificial intelligence and automation, it is increasingly going to be a question of where the skills are available and business will go there. There is really no alternative because if companies do not adopt and adapt, then they will go out of their main business. I am talking about the non-IT companies and the non IT businesses themselves.
There is no option really for anybody and beyond a point, it is very limited what governments can do and the only thing that governments really need to focus whether in India or elsewhere is to look at the skilling equation and see how much that can impact the domestic availability of skills because unless it is done, you will not be able to keep the jobs in your own country.