Indians needed elsewhere, not US
In the mother-of-all-deals with the European Union (EU), mobility of Indian professionals to Europe was a crucial clause. The same was the case with the distant-cousin-of-all-deals with Australia, where the two-way flow of skilled workers was mentioned. However, as the Commerce Minister Piyush Goyal said in an interview, the H-1B visa issue did not figure in the India-US talks, and final framework. The reason: IT firms do not wish to send techies to the US, as most of the work has shifted to offshore campuses in India. In essence, migration to America is no longer relevant as part of the business strategies.
“H-1B visa lost its significance significantly post-Covid. We have already seen the impact of that with the growing number of GCCs (global capability centres) that are now operating in India,” said Goyal. India’s IT minister, Ashwini Vaishnaw, recently disclosed that more than 2,000 GCCs operated in the country. It marks the transition from being a traditional software services model to Artificial Intelligence (AI)-driven approach, as India aims to become a global hub for next-generation digital services. As Goyal explains, “The same work can be done from offshore locations instead of sending employees to high-cost economies like the US, the UK, or major global cities.
If this is true, then why the insistence on mobility pact with the EU, and Australia? In the case of the EU, the bilateral trade deal “facilitates” the movement of skilled workers, which include professionals, researchers, and students to Europe, “especially in shortage sectors like ICT, and green-tech.” The provisions make it easier for Indian students to study and work in the EU. Of course, the same logic does not apply to the US, where students are among the worst sufferers due to regular, and consistent changes in the American visa regime. One gets a whiff of the maxim that the grapes are sour when they are inaccessible.
Possibly, the commerce minister understands the ongoing, and forthcoming trends in the IT and software sector. In the recent past, Indian IT stocks crashed, largely because of the bear-like grip over American tech stocks, and trends in Nasdaq. One of the prime concerns is the impact of AI. The immediate trigger was the launch of a tool that can automate legal tasks, which “deepened the cautious outlook on software stocks, as investors grow increasingly uneasy about rising competition, and potential pressure on margins due to rapid AI adoption.” As AI solutions become advanced, software firms will find it tough to maintain pricing power, protect profitability, and retain a chunk of the existing onshoring and offshoring work.
In essence, the traditional work will slowly die, even as Indian IT firms adopt AI to automate processes and systems. But most of this work can be done inhouse, more cheaply and efficiently, by the clients. They will, thus, outsource less work and responsibilities. Hence, Indian IT firms will need to upgrade AI tools, and offer them at cheaper costs. Since most of the AI adoption and adaptation is happening in the US, this market will be the first one to be impacted. The future of Indian IT in America will get diluted over the years. Of course, we will need a lower number of Indian techies to be based in the US.
Moreover, the thinking among the Indian IT firms is that until Donald Trump, the US president, is in power, the attacks against H-1Bs, and more stringent measures will become the norm. Indian techies and students will find it tougher to move to, and work in, the US. Even with Trump gone, the railings and wailings against Indian techies may continue. The best solution is to seek markets elsewhere, and increase it in the regions where Indian IT is entrenched. Both the EU and Australia offer immense opportunities. Obviously, it is better to send techies there, rather than to America, when Indians too are cagey to go.
Such reasoning and logic may explain why the mobility and migrant clauses find references in the bilateral deals with the EU and Australia. In the case of the EU, experts, officials, and ministers dubbed the mobility measures as a “game-changer for labour flow, allowing for better, more structured migration pathways rather than completely open, uncontrolled movement.” Key clauses include fast-tracking visas, recognition of skills in tech and healthcare, and easier movement of workers, including the return of the illegal migrants. In sectors with high demand in the EU, the initial phases may include quotas to manage the flow of the workers, and assuage local sentiments.
Recently, India was even willing to send low-skilled workers abroad. During the visit of Russia’s Vladimir Putin, New Delhi disclosed how Russia wanted a huge number of Indian workers to work in remote sites like Siberia to deal with labour demand. The salaries were lucrative compared to what a typical low-cost worker earns in India. This is why Goyal’s insistence on low demand for Indian techies in the US does not fit in, unless his logic is in sync with what IT firms want. Thus, the business logic seems to be driving diplomacy moves.
Of course, one can ask, where does this leave the aspirant techies, and ambitious students, who see America as a route to prosperity, riches, and possibly citizenship? Despite the frenetic growth in the country, job opportunities, and lucrative ones, remain limited. Only the top creamy layer from top-notch B-Schools and professional colleges land best-paying jobs. The others need to don the status of second-level professionals. In the US, in contrast, they can climb up the hierarchies if they perform efficiently, and work hard. Indian students in the US can join the best companies if their grades are good.
One of the options for the techies and students is to give up the American dream, and focus on the EU and Australia, as well as other nations and regions. The IT firms wish the same, as they need to expand in these new, non-US regions. Indian policy-makers, willy-nilly, desire the same because their diplomacy is blunted with Trump in power in the US. As the edit piece on this page (Our Take) indicates, we may have given in a bit too much under the India-Us trade deal, and not got enough. Of course, these are matters of interpretations, which differ dramatically. But H-1B may be an example of the latter, where India gave up efforts since the returns were not commensurate.
