Indian IT Industry contemplates on Trump’s Administration

The $150-billion Indian IT industry, already faced with the headwind of slowing growth, may

face further uncertainty with the election of Republican candidate Donald Trump as the new

president of the US, the country which accounts for around 60% of India’s software exports.

#DigitalErra Thought Corner

Dealing with unemployment by creating jobs in America is of prime importance for Trump

administration. Trump vocalized to take action against those companies who move jobs outside

America leaving the locals jobless by levying a 35% tax on products made overseas by such

companies. He also promised about ending the “abuse” of the H-1B visa, a popular visa used by

Indian IT companies to transfer employees to US branches. However, he kept an open view with

respect to high-skilled immigration that plays crucial roles for developing the US economy.

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What India says?

India is a key global player and an important asset for productivity in corporate America. US

accounts for 50-60% of the revenues of India’s IT sector.

IT industry body Nasscom's president R Chandrashekhar shared the voice of many when he said

'candidate Trump' must be distinguished from 'President Trump'. "On the campaign trail,

statements are not based on calculated assessments, on what is possible or what the impact will

be. You could say you will eliminate H-1B visas, build a wall. But practically, you have to see

what you can do to boost the economy, create jobs," he said.

V Balakrishnan, former board member of Infosys, told FE that there could a knee-jerk reaction

from the US administration in terms of increase in visa fees or minimum wages but expects

economic realities to take over. “America has shortage of skilled workforce and India is one of

those countries which can fill the gaps,” he added.

IT Industry’s defense

Primarily, India’s IT industry has faced many anti-sourcing backlashes in US which resulted in

increased cost of operations. The Indian IT companies have constantly spoken about the kind of

investments it has made in US which also says about setting-up local development centers

benefiting the local community.

Conclusion

India and US have a target of increasing bilateral trade to $500 billion from the current more

than $100 billion, but no timeline has been set for this. Trump’s comments on Indian businesses

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can be termed as “election time rhetoric”. US has shortage of skilled workforce where India fill

in very easily with her highly- skilled personnel. Outsourcing has always been a cost cutting

methodology. This has helped India with employment generation and the US MNCs with vast

savings. The fact is known to all and can be counted as a measure of development for both the

economies.

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