 "US election: Joe Biden victory could lift IT sector’s spirits, say experts")
Even as the battle for the White House still remains inconclusive though the Democrats, led by Joe Biden, are just a few steps away from victory, the technology outsourcing industry is feeling the ripple effects.
IT stocks on Thursday surged as the poll results neared conclusion in anticipation that the Democrats, considered more liberal on immigration, will return to power in the US.
India’s IT industry is heavily dependent on visas. Its ability to be able to work with clients with seamless movements of people from offshore to client geographies has been one of the factors in success.
Experts are of the view that Biden winning could mean slightly easier immigration, and less restriction on H1B visa norms — which could be good news for IT companies such as Wipro, Infosys, Tata Consultancy Services, and HCL, because they have offshore businesses in the US.
“While there were uncertainties during Donald Trump’s regime, there were no major changes at law level. Overall Biden might be slightly more flexible on immigration. He will be more open to such issues,” said Pareekh Jain, founder of Pareekh Consulting.
Joseph Anantharaju, executive vice-chairman, Happiest Minds, said: “We have to see how the Senate and the executive branch work, and there is potential for a bit of gridlock and how Biden navigates (if he comes to power).”
Immigration is a tricky topic in the US and irrespective of whoever comes to power there is going to be no massive reversal in policies, say analysts. “Indian IT cannot avoid the need to change their business models in the long run. More room will have to be made for automation and cloud by these companies,” said Sanchit Vir Gogia, founder and chief executive officer, Greyhound Research.
Biden in his poll promise said he would increase the number of visas offered for permanent, work-based immigration, based on macroeconomic conditions and exempt recent PhD holders in STEM (science, technology, engineering, and mathematics) from any cap.
And, he will first support reforming the temporary visa system for high-skilled, specialty jobs to protect wages and workers, and then increase the number of visas offered and eliminate the limits on employment-based green cards by country, which have kept so many Indian families in waiting for too long.
Biden has also been clear on his stand to raise taxes on companies, businesses, and wealthy Americans.
A management consultant said: “If corporate taxes are raised, outsourcing may increase. Big 4 (TCS, Wipro, Infosys, and HCL) may face more regulations and there may be some effect on Indian IT, their captives, and vendors. Government spending will go up and hence more benefits to HCL and TCS through partnerships.”
