Immigration Reform News 2017: India IT Outsourcing Worried

By Edward Leano, Christian Post Contributor Tuesday, February 28, 2017

Indian-owned outsourcing companies in the Unites States that corner a good portion of the annual H1-B visas are now faced with falling shares as the next round of President Trump's immigration reform measures are awaited by the market.

Forbes.com has a report on what it calls a "headwind" for Indian Information Technology (IT) outsourcing companies. Gaurav Sinha, an Asset Allocation Strategist for Wisdom Tree, observes that "All India IT companies have been falling in the last few weeks. But I think it's a short-term headwind for them."

9.5% of India's gross domestic product (GDP) comes from four IT outsourcing companies: Infosys, Wipro, Tata Consultancy and HCL Technologies. "About $95 billion in business would be impacted," Sinha says.

The vast majority of H-1B visa are taken by Indian software engineers, most of which are stocked by the major Indian IT outsourcing firms to supply low-cost workers to the U.S. job market, especially in Silicon Valley. According to the U.S. Citizenship and Immigration Service (USCIS), about 70% of the 2015 visa allocation have been snapped up by Indians.

Indian executives from these firms have gone up to Washington to impart some interest group pressure on Capitol Hill. These lobbyists are seeking some advance information on the proposed immigration reform policies to see how it can affect their bottom line.

A big issue for these Indian tech firms is a proposal from representatives like California Democrat Zoe Lofgren who want to see the salary raised to $130,000, from an average of $77,000 in 2015. This may eliminate the incentive for undercutting and worker displacement that renting cheaper Indian software engineers allegedly bring to U.S. tech companies.

However, executives like Brillio chief executive officer Raj Mamodia think that paying Indians the proposed increase will be a problem. Referring to the current salary of his H1-B workers, "I think that is very good compensation. If I have to pay 30% more to foreign workers, what do I do with my American citizen workers? They will want more too." says Mamodia.

An Indian lobbyist summarizes their sentiment. "We are bracing for the worst," he said, adding that they are now starting to try to hire locally.

There may still be time to ask for help from their Washington allies who have been in favorable standing with the Trump administration. Just recently, the Republic Hindu Coalition was in full support of Trump's immigration ban, and also voted to include Afghanistan, Pakistan and Saudi Arabia in the countries named in the executive order.