HOW THE BAN ON H1B AND OTHER VISAS GOING TO AFFECT TECH MAJORS TCS, HCL, WIPRO, INFOSYS AND TECH MAHINDRA? DETAILS

Indian Technology majors are likely to be less affected by the suspension of H-1B and other work permit visas, by the Trump’s Administration. TCS, Infosys, Wipro, Tech Mahindra, and HCL Technologies are not concerned by this move.

According to reports, these tech companies have been reducing their dependence on visas for the last few years. They have also been recruiting people locally.

Aniket Pande of Prabhudas Lilladher pointed that TCS, Wipro and HCLT have increased localisation efforts in the States and have more than 50% local US workforce.

Since the suspension of these visas analysts are foreseeing a case for more offshoring of work. Since the commencement of the global pandemic, offshore revenue has been growing and is expected to continue growing in the coming quarters. “With work from home implemented at such massive scale post COVID-19 by Indian IT vendors, borders might be losing relevance,” said IT analyst, Madhu Babu of Centrum Broking, to the Economic Times.

“We are seeing once again a shift toward greater offshore delivery as compared to ‘onshorization’ in play through a better part of the CY10-20 decade…Given a weak macro environment and potential reset in client businesses due to Covid-19, we see a case for greater offshoring in the sector over the medium term,” said a global financial analyst.

“We note that though overall unemployment in US is high, unemployment in computer related jobs is low at 2.5%. Also new H1B visas issued this year who were likely to enter USA (from October 2020 onwards) would be very minimal for Tier 1 IT vendors,” a source told ET.

However, employees from this technology sector with H1B Visa extensions, stranded in India currently, will not be allowed to enter the States until 2021.

“Companies have managed to conduct project initiation and knowledge transfer via WFH. We believe Tier 1 IT companies are in a good position to manage supply constraints due to further restrictions on H-1B visas provided these restrictions are for a brief period,” said Aniket Pande.