TCS, Infosys, Wipro on edge as H-1B changes loom with Trump's return

This may have an impact on India's $250 billion tech sector which plays an important role in the economy, employing about 5.4 million people

With Donald Trump poised to return to power in 2025 after winning the election, his administration is expected to implement stricter H-1B visa policies, including higher wage thresholds, reduced visa caps, and a focus on prioritising US-educated or higher-skilled applicants, according to industry experts.

 

The H-1B visa programme, which allows US companies to hire skilled foreign workers in specialised fields, has long been a subject of controversy.

 

Experts predict that Indian information technology (IT) giants like Tata Consultancy Services (TCS), Infosys, and Wipro may face operational disruptions and increased costs, pushing them to scale up local hiring in the US, invest in automation, and explore alternative markets.

 

“These changes could severely limit opportunities for Indian IT professionals in the US and increase competition for fewer visas,” said Jidesh Kumar, managing partner at King Stubb & Kasiva. “These shifts could ripple through India’s IT export economy, slowing growth and requiring diversification to maintain global competitiveness.”

 

India’s $250 billion technology (tech) sector, which employs around 5.4 million people, could feel the impact. Tech services account for about 7.5 per cent of the country’s $3 trillion gross domestic product. The industry is targeting $350 billion in revenue by 2030.

 

According to US Citizenship and Immigration Services data, Indian nationals were granted 72.3 per cent of all H-1B visas issued in 2023, underscoring the programme’s significance for South Asian workers. In total, 755,020 people were admitted to the US on H-1B status last year, according to the Office of Homeland Security Statistics.

 

‘Sitting ducks’

  Experts note that during his previous tenure, Trump sought to curb the H-1B visa programme, resulting in higher rejection rates, increased visa processing charges, and wage inflation for H-1B workers.

 

“Indian IT companies are sitting ducks amid the brewing political storm over H-1B,” said Russell A Stamets, partner at Circle of Counsels. “There are many anecdotes of US citizens training their Indian replacements. While some stories may be exaggerated, there is truth to them.” He added, “No election or temporary policy will seriously damage the US’ ability to attract top talent, but Trump is willing to publicly acknowledge what many others have avoided: American workers are not well served by the current visa system.”

 

Tech billionaire Elon Musk, who previously defended the H-1B programme, has since shifted his stance, calling the system “broken” and in urgent need of “major reform”. Musk, who entered the US on an H-1B visa, has proposed raising the minimum salary for visa holders and introducing an annual maintenance fee.

 

Musk and Indian-American entrepreneur Vivek Ramaswamy, who are advising Trump on reducing federal spending, also advocate for increasing the influx of foreign tech workers.

 

Stamets at Circle of Counsels believes Musk and Ramaswamy’s support for the H-1B programme reflects Silicon Valley’s stance on global labour access.

 

“Their support contrasts sharply with other parts of Trump’s MAGA (Make America Great Again) coalition, which is suspicious of foreign workers benefiting corporate profits while disadvantaging American workers,” said Stamets. “Musk and Ramaswamy are focused on cheap, pliant labour, which will inevitably clash with the MAGA supporters of American workers.”

 

US President Joe Biden recently implemented changes to the H-1B programme aimed at improving the authenticity of applicants. Given the programme’s economic value to American businesses, experts argue that a large reduction in available visas is unlikely.

 

“There may be some adjustments, but they will likely be minor, with a rebound when the economic or political environment changes. For individual H-1B applicants, these are scary and unpredictable times,” said Stamets.

 

The recent appointment of Chennai-born Sriram Krishnan as senior White House policy advisor on artificial intelligence (AI) sparked a backlash from Far-Right figures like Laura Loomer, who criticised the appointment and claimed H-1B holders are taking jobs from qualified Americans — an argument they say undermines the ‘America First’ agenda.

 

Local hiring

 

However, Venkatesh Balasubramaniam, managing director and co-head of research at JM Financial, recently told Business Standard that Indian IT services firms are better insulated from anti-immigration policies, as they’ve been ramping up local hiring in the US since 2020.

 

For instance, TCS has hired around 20,000 locals in the US since the pandemic, and Infosys has committed to adding 12,000 local employees over two years.

 

TCS, Infosys, and Wipro did not respond to Business Standard’s request for comment.

 

While the immigration debate is crucial for large Indian firms like Infosys, Wipro, and TCS, experts argue that it is not the primary threat. Any outsourcing business dependent on wage arbitrage will soon face the disruptive force of AI.

 

“When someone as successful as Narayana Murthy (Infosys co-founder) advocates for a 70-hour workweek amid the AI revolution, it raises questions about the industry’s ability to adapt,” said Stamets. “Preaching to overworked young people isn’t the solution to a generational challenge like AI.” 

Uncertainty ahead?

 

Stricter policy may impact India’s IT export economy, slowing growth and necessitating diversification

 

Support of Elon Musk and Vivek Ramaswamy for the visa program shows Silicon Valley’s viewpoint on access to global labour, say experts

 

$250 bn  Worth of India’s tech sector 

 

5.4 mn  Workforce it employs

 

72.3%  Share of Indian nationals of all H-1B visas issued in 2023