Indian IT cos don't see any immediate challenges due to India-Canada tussle

Indian IT firms do not expect any immediate challenges for their business due to the diplomatic tussle between India and Canada, Financial Express (FE) has reported. However, the companies are keeping a close watch on the developments. IT industry body Nasscom was cited in the report as saying, "We are in close touch with our members in Canada, and as per their feedback, there are no immediate areas of concern."

IT firms make about 5-6 per cent of their total revenue from the Canadian region. Additionally, they have expanded and based their operations close to Canada in the last few years. The FE report cited data from the Technology Council of North America and Canada's Tech Network, which said that Indians are the largest group of tech industry workers who have moved to Canada in financial year 23. The report estimated the number at more than 15,000 people.

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Due to the visa problems in the US during the Covid-19 pandemic and during Donald Trump's government, many Indian-origin tech employees preferred migrating to Canada instead of the US. However, as getting a US visa has become relatively easier in recent times, many tech workers are moving to the US from Canada for better salaries, the FE report said.

The North American subsidiary of the Indian IT company, Infosys, opened a new step-down subsidiary, Infosys Public Services Canada Inc (IPS Canada). Infosys is planning to expand its workforce in Canada and take it to 8,000 by 2024, the report stated.

In January 2023, Tata Consultancy Services (TCS) was selected as a strategic partner by the Canadian jet manufacturer Bombardier to accelerate its digital transformation and drive innovation. Apart from this, TCS also entered a strategic partnership with Payments Canada, which is Canada's largest payment organisation.

What has happened between India and Canada?

It all started with Canadian Prime Minister Justin Trudeau accusing the Indian government of the assassination of a Sikh separatist, Hardeep Singh Nijjar, on Canadian soil. The Indian government has taken an offensive stance, terming the accusations "absurd and motivated."

So far, both Canada and India have expelled senior diplomats in reciprocal moves. On Thursday, September 21, India temporarily suspended visa services for Canadian citizens.