Home >News >India >Trump’s H1-B visa ban may be a boon for global in-house centres

BENGALURU: US President Donald Trump’s move to suspend work visas including the H1-B category, used by Indian IT companies to transfer skilled workers abroad, is expected to be a boon for global in-house centres, commonly referred to as GICs, in India.

The ban on the H1-B and L1 visas (intra-company transfer) could lead to several US-based multinational companies shifting high-skilled jobs to countries such as India by setting up their own GICs and expanding their existing centres, experts said.

“The technology market in the US is heavily dependent on the H1-B visa. With the ban being imposed, GICs will definitely try to make up for the talent shortage by hiring more locally in India," said Harish Pillai, director and country head, Randstad Sourceright India, a talent management solution provider.

According to consulting firm ANSR, GICs in India have grown at 15% year-on-year and have emerged as the strongest growth driver for the Indian IT industry. The number of people employed by GICs in India has risen to almost a million people in FY19 from 7.45 lakh in FY15, according to a joint report by Nasscom and research firm Zinnov.

“The work visa ban is a fantastic opportunity for the growth of GICs which allow global companies to access top talent and build teams where they are. Unlike IT services firms where some part of value relied on sending people onsite, GICs firmly believe that the best opportunities must be available to the best talent, irrespective of where they are," said Vikram Ahuja, cofounder, Talent500 by ANSR.

Analysts believe India has been the hotbed for GICs for many years and the work visa ban is expected to further accelerate the momentum. “Companies will expand their India footprint if they are unable to hire in the US. This will reduce the number of senior leaders relocating from the GIC locations to headquarters, ensuring that a critical mass of top technical and domain experts stay at the GICs, driving global roles from India," said Pari Natarajan, CEO, Zinnov.

Retail and financial services sector are going to be the key growth drivers for GICs in India. “Despite the pandemic, many of these companies have seen growth and are keen to invest into technology to help drive their transformation into digital-first companies," said Ahuja.

For instance, investment banking firm Goldman Sachs, which set up its Bengaluru operations in 2004 with just about 290 employees, now has over 5,000 people, including several engineers working on development and application of artificial intelligence, machine learning and data analytics to help solve business problems.

Sun Life Asia Service Centre (ASC) India, the GIC of Canada-based Sun Life Financial located in Gurugram with 1,800 employees, plans to hire more than 200 employees in 6 months.

While India has its advantages, it faces stiff competition from other emerging locations such as Poland, Romania, Budapest, Costa Rica and Brazil as large multinationals explore potential geographies to set up their GICs.

“While people cost in India has gone up compared to earlier, it still has a cost advantage of at least 30%-40% in terms of real estate and infrastructure," Pillai said. The emerging destinations are picking up steam as they have been investing in building English-speaking and STEM-skilled talent since many years. But the scale in India is much higher."

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