Trump Policy – Is There Any Fear for Indian IT Industry ?

There is no doubt that Trump’s Presidency is going to impact the world. Not just China and Mexico but also the country like India which is a trading partner of US.

During his election campaign, he promised to bring back jobs from countries like China, Mexico, Japan, South Korea and even India. Although India was not his main target as oppose to China and Mexico but still businesses and students here are apprehensive about Trump’s policy towards India.

In this article, we will see how Trump’s policy can affect Indian companies in general and IT in specific.

So what to expect in coming days if you are looking for IT jobs.

Trump Effect On IT Companies

An Overview of Presidents’ Trump Policy Impacting India

Trump’s trade policy can affect not only IT jobs but also various other businesses in India. In this paragraph, we take an overview of Trump’s policy towards India. The spectrum can be broad because foreign policy is a collection of many different policies like trade, foreign affairs, cultural exchange, terrorism etc. To be honest Trump’s policy is going to be a mixed bag.

On one hand, it can affect big IT companies in India adversely, on the other hand, it can benefit other businesses in India. However, people are more concerned about IT jobs. Trumps’ policy can impact education and career plans for students in India adversely. It can also affect travel plans.

Trump’s policy of cutting corporate tax rates, reducing regulations, imposing a tax on imports to check inflation and employment generation may force US Federal Reserve to further hike interest rates.

This means the dollar is going to get stronger making US goods and services more expensive for Indians. So you have to pay more if you are planning to go to the US and study there.

The Strong dollar is also going to make tuition fees costly and fees for tests like GRE, GMAT, TOEFL or IELTS even more expensive. Not just studying but traveling is also going to cost dearly.

Effect of Trump’s Policy on Different Sectors

In this paragraph, we will look at the effect of Trump’s policy on different sectors including the IT.

1. Outsourcing

It is well-known fact that India provides better services at a cheaper rate. If an American businessman wants to set up an office in the US then it would cost him 5 to 6 times higher as compared to setting up in India. So they choose to outsource their business to India like BPO and call centers.

However, Trump’s new policy can change this. If Trump administration starts levying taxes on companies which outsource their job to India then such companies will be forced to relocate their offices back in the US. This could affect Indian outsourcing companies adversely and they might have to cut jobs here.

2. H-1B Visas

This is the most important area which is going to be hit by Trump’s policy.As you know Indian IT companies need H1 B1 visas to send their employees to the US.

Trump’s wants to ban all kinds of immigration including H1 B1 visas. Trump wants to restrict the flow of IT professionals coming to the US because he believes they are taking American Jobs.

So if he implements tougher immigration policy then only few IT professionals are going to get H1 B1 visas in coming days.

3. Manufacturing

As far as manufacturing is concerned then India is quite safe. Countries like Mexico and China have to worry more when it comes to manufacturing.

Trump wants that US companies should manufacture their products in the US using local labor. He wants companies like Apple to manufacture their computers and iPhone here in the US. If companies are not doing so then he is going to levy 35% duty on items like Car manufactured in another country like Mexico or China coming to the US.

4. Domestic Growth

We shouldn’t take Trump’s policy negatively. Because we can look inward and start innovating. Instead of giving services we can start innovating and creating new products on our own.

We hardly innovate because of the lack of research and development. So it is the best time to become self-sustaining economy without depending upon one country.

5. Terrorism

Although terrorism has nothing to do with IT jobs or economy but it is very important part of Trump’s foreign policy. Trump administration has already placed a travel ban on 7 different countries. India also suffers from Terrorism and both countries can come together and work on this issue.

So these were 5 different areas that may get affected by Trump’s policy.

Effect of Trump’s Policy Especially on IT Jobs

In this paragraph, we shall look in great details how Trump’s policy can affect IT jobs in India. Indian IT companies draw their most of the earnings from US market. Over 60% comes from just one country.

You can imagine if US companies start cutting down on outsourcing jobs to India then how badly Indian IT companies will be affected. This is also going to affect IT professionals who want to apply for H1 B1 visas to work in the US.

Trump administration wants to change the H1 B1 visa rules by restricting low wage IT workers entering the US. The wage limit that they want to set is $100,000 so that low wage IT workers do not replace American workers.

Therefore, it means low wage IT workers who want to work in the US are going to be hit by Trump’s new policy.

Trump’s policy is also going to affect Indian IT companies. According to NASSCOM hiring in IT sector is going to drop 20% in 2017. So companies like Infosys, TCS, Wipro or HCL are going to hire fewer students this year in India.Infosys already laid off 9000 employees in 2016. Not just India even companies like Oracle have started laying off their employees in Beijing.

So as an IT worker who want to go abroad and work must avoid the US and look out for other countries.

What are Positives for India?

You might be thinking is there any positive impact of Trump’s policy on India. Experts believe that the cooperation between US and India is going to grow because of defense and strategic ties. Both countries see China as a potential threat so they want to come close. This means closer defense ties fostering the growth of India’s defense.

For example, Lockheed Martin wants to manufacture F 16s fighter planes here in India. Similarly, Anil Ambani’s firm is going to service over 100 US navy ships. Thus more jobs in defense sector can impact India positively.

So this is how Trump’s policy will affect India’s IT sector and the overall economy.