Why H-1B Changes Could Benefit Some Indian Software Professionals

Proposed changes to the H-1B visa program by the new Trump administration in the United States may benefit some Indian techies, according to Ignatius Chithelen, founder and managing partner of Banyan Tree Capital Management. He is also the author of "Six Degrees of Education: From Teaching in Mumbai to Investment Research in New York". US President Donald Trump last month signed an executive order that seeks to make changes to the H-1B visa program - most sought after among Indian IT professionals - that brings in highly skilled foreign workers. The new H-1B norms could lead to a rise in labour costs for technology companies and businesses using outsourcing services in the US, Mr Chithelen opined, arguing that some Indian visa holders could actually benefit from such a move. "Over a million Indian professionals are estimated to have migrated to the US on H-1B visas...They have also been a major factor behind the computer, internet and related technology boom in the US since the 1980's," he wrote in an article published on the website of Wharton School of the University of Pennsylvania. Mr Chithelen expects new policies for H-1B visas to be announced in November, or "possibly earlier".

Here are key things Mr Chithelen said:

1) The new rules for the visas could raise labour costs for both technology companies and businesses using outsourcing services in the US.

2) These extra costs are estimated to be about $2.6 billion a year.

3) Few chief executives in the US will want to bear the added labour costs and show lower profit margins. So they, too, will increase automation and move more operations to India and other low-cost regions.

4) If, starting in 2018, H-1B visas are issued to those with the highest wages and skills, Indian professionals could benefit. (Also read: Amid H-1B visa row, US says 'greatly value' Indian investments)

5) Indians graduating with advanced degrees in the US and highly skilled professionals in India applying for H-1B jobs should then be able to find jobs with higher wages and better working conditions.

6) There is expected to be sharply increased scrutiny over wages, skills and qualifications of the visa applicants by the Labor, Homeland Security and other government departments following the "Buy American, Hire American" presidential executive order issued April 18.

7) From next year, the visas could go to applicants with the highest wages and skills, and the number of H-1B visas issued may also be reduced since the focus is to "Hire Americans."

8) The outsourcers could try to contain costs by increasing automation and expanding the services they offer from India, where the wages for technologists are far lower than in the US.

9) They could also try to hire Indians and locate them in Canada to serve the neighboring US market.

10) Some of the Indian IT companies, along with enterprising new companies, may decide to move into more lucrative, higher-end technology businesses like cloud-based services, data mining, cyber security and robotics in India and export markets.