1. Indian IT industry sweats after Donald Trump elected next President

Indian IT industry sweats after Donald Trump elected next President

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.

By: | Bengaluru | Updated: November 10, 2016 7:28 AM
Arup Roy, research director, Gartner, said, “Now with Donald Trump, administration will add to the industry’s woes. (Source: Reuters)

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. Trump, during his campaign, had repeatedly spoken against IT outsourcing and immigration, even mentioning Indian companies such as Tata Consultancy Services (TCS) and HCL Technologies.

Arup Roy, research director, Gartner, said, “Now with Donald Trump, administration will add to the industry’s woes. The Trump administration’s protectionist views would have further dampening impact on growth prospects, if the views were to crystalise into some serious policy implementations.”

Industry executives, on condition of anonymity, told FE that there could be a delay in the decision-making process in the US market as they await the policy tenor of the forthcoming Trump administration. “Traditionally, we have seen Republicans more supportive of Indian IT when compared to Democrats,” an executive said, providing a counter view.

The Indian IT industry’s trade body, Nasscom, in a statement said that Trump’s observations regarding outsourcing and high-skilled immigration “were based on fabrications put out by critics of the sector.” Nasscom said that it would be keen to engage with the Trump administration. “Our sector plays a key role in helping US businesses innovate and grow and make corporate America more competitive.”

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.

The Indian IT industry has been faced with an anti-outsourcing backlash in the US, which include facing certain class action suits and rules that have increased their cost of operations. The Indian IT companies have constantly spoken about the kind of investments it has made in the US, which includes setting up local development centres.

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    Antonio Fargas
    Nov 16, 2016 at 3:05 am
    I was once let go of my Vice President level Trading Systems Project Manager job to be replaced by 3 Indians with H1Bs from a firm called Headstrong. I truly hope that Trump stops this baloney - it's cheap labour and not highly specialized staff like the H1B was created for. It simply puts Americans out of work and suppresses wages. Go Mr President ELECT send these crooks back to Mumbai
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      Raquel
      Nov 10, 2016 at 3:57 pm
      The true problem that must be solved is to educate American youth and promote technology. College education in US is costly and the average American can't afford to go to good schools. It's also about inspiring them and making careers in technology attractive to this generation.
      Reply
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        akshay
        Nov 13, 2016 at 11:03 pm
        Very good decision !!! Anyways the indian IT industry doesn't by any means have skilled labors !! they are cheap labors !! I hope he can pull this straw which has exploited IT sector so that Indians with true potential can make it BIG. Stop giving these companies H1B if they really are smart i welcome them to come to US get a degree, prove there credentials and get a job. This fooling tactics needs to come to an end.
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          AH
          Nov 10, 2016 at 6:09 am
          Outsourcing has been a cost cutting methodology adapted by the US tech biggies and then folowed by a lot of small and medium business enterprises. This has helped India with increase employmenmt rates and purchasing power. The fact is that the US companies also understand that they will have to rely on skilled workforce availble readily in India and hence it is win win situtaion for both economies.
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            Varun Mohan
            Nov 13, 2016 at 10:07 pm
            It will come down to what the US industries are willing to compromise on -Cost,quality or time. If they cant compromise on cost, all this is just politics. Nothing will happen on the ground
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              john
              Nov 14, 2016 at 3:48 pm
              If you left a hundred monkeys in front of a hundred typewriters for a hundred years eventually you’d manage to get Shakespeare.
              Reply
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                Brendan
                Nov 10, 2016 at 7:27 pm
                Please. Shortly before the mive IT Outsourcing movement, college IT programs had more people. I've spent my career at Fortune 500 companies, and at every single one have spent my time teaching basic programming to new 'HIGHLY SKILLED' replacements. I have heard several times by managers 'well even if the quality is poor, and we have to redo it, at these prices we can redo it three times!'. And I get to redo it the fourth! As Alan Greenspan said, H1B is really only meant to keep down IT wages, not find missing talent. And keeping these wages down keeps new students from pursuing careers in IT. I don't know any of my colleagues who would recommend it to their kids
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                  Keedi Tohu
                  Nov 11, 2016 at 12:29 pm
                  They have local IT staff that has been outsourced to temporary visa holders that they have had to train, the only reason being that the local people are on American ries, and the temporary workers from overseas are on lower ries. Put yourself in their shoes, they have families to support. How would you feel when something like that happens to you? In such cases, there is no "shortage" of local labour, since local people are being replaced. It is just that the company does not want to pay higher ries so goes for temporary workers. I would also like to ask, what would hiji, who was all for Swadeshi, have thought of this outsourcing and taking away the jobs of the locals? My feeling is he would have opposed outsourcing on moral grounds. We must try to understand what people feel.
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                    mike
                    Nov 11, 2016 at 8:30 pm
                    India has more a skilled workforce than the United States? Oh Really?Then WHY are our Universities jam-packed with these people?And NOT the other way around??? Just India RHETORIC!The time is at hand to shut.... it... down!
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                      Nandini
                      Nov 10, 2016 at 8:36 am
                      That's why it is time we voters learnt our lessons!
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                        Nithin John Mathews
                        Nov 10, 2016 at 7:40 pm
                        But after hearing to the winning speech of Trump, Indian IT is rejoicing.
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                          Peter Marik
                          Nov 12, 2016 at 5:27 pm
                          Companies like RouteOne in Farmington Hills, MI hire Indians like crazy into their company. Is there a reason they can't find Americans to fill the roles in I T? You walk around their offices and they don't even converse in English.
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                            Sid
                            Nov 14, 2016 at 4:57 am
                            Mike,let me reconfirm that YES Indians are better skilled in their wok than Americans and that is the reason you see the top company CEO's are Indians....All those people had a humble beginning and made it big because of their skill sets, And why students are coming to US to study and not vice versa, well it is for US students to answer, may be they are afraid of the compeion in India and they are apprehensive they would be left behind..dians are not afraid to test their knowledge anywhere in the world.....So please embrace reality and stop making Joke of Indians
                            Reply
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                              S.S.Marthandam
                              Nov 11, 2016 at 10:45 am
                              Every journalist in the mainstream US media specialises in Trump bashing. Do give the guy a year before you judge him. It's a very complicated job.
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                                Tom
                                Nov 16, 2016 at 1:17 am
                                The US does not have high skill people. What a bunch of BS.
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                                  Ravindra P
                                  Nov 10, 2016 at 6:27 am
                                  America has shortage of skilled workforce and India is one of those countries which can fill the gaps this is a business need so I believe politician can hardly change this overnight the demand & supply has to be evolved gradually not like a button switched off
                                  Reply
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