By Categories: Editorials, FP & IR

Legislation has now been introduced in the US House of Representatives which, among other things, calls for more than doubling the minimum salary of H-1B visa holders to $1,30,000, making it difficult for firms to use the programme to replace American employees with foreign workers, including from India. The question is, how should India react?

But if one goes by a sudden drop in stock prices of Indian IT companies and the growing noise Trump’s advisers are making on streamlining the process of issuing visas to foreign citizens, the future prospects of thousands of engineers studying in the US is bleak. While IT giants like Google and Facebook should and will fight this out legally, the problem is the uncertainty it creates for both future employees and employers.

Below is the graph that helps explain the impact of HIB visa on different sectors. It is indeed the bread and butter of Indian IT industry.

The question of – how should India react? is more of a strategic question and requires long-term planning and investment rather than a short-term booster short. Nevertheless there is no booster shot for this to turn around in India’s favor, all India can do is strategies and chalk out plans for the future to be shock-proof, but then that’s future, the present will be of suffering, jobless and a huge deal of uncertainty. Of course lobbying and other legal means are there to fight this move, but then Trump is a business man and this is a classic business move.Raise the cost so high that the compromise will still be beneficial for the seller.(Cost of product- 20 rupees, Marketed price- 200 rupess – now how much one can bargain on this? Of course Indians are well aware of bargaining tactics, yet any bargain in H1B will favor Trump and Indian IT industry will loose some of its fat belly).



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