Indian IT firms should brace for Trump's second term

Restrictive visa, trade and other policies under Trump 2.0 may force a review of their US-centric business models

- SIDDHARTH PAI

The US has been the largest market for India's IT services industry for decades, with companies like HCL, Infosys and TCS providing outsourced services to American firms across sectors. About 55% of India's IT sector revenues come from that region. However, a second term in power for Donald Trump in the US raises new concerns for this industry. Among these are changes in America's HIB visa program, potential tariffs and other regulatory shifts.

During his first presidency, the Trump administration made substantial changes to the HIB visa scheme, which is the lifeblood of the Indian IT industry's operations in the US. HIB visas allow skilled foreign workers, particularly in the tech sector, to work in the US temporarily. Indian IT firms heavily rely on these visas to send skilled talent from India, filling in-demand roles at client sites across the US. But Trump's policies included tightening the eligibility criteria, raising the wage floor for HIB workers, and even suspending the issuance of new HIB visas during the covid pandemic. These changes made it more difficult and costly for Indian firms to deploy their employees on US soil.

These policies also meant higher operational costs and a slowdown in visa approval, thus disrupting project timelines. Many companies were forced to raise their hiring of US nationals, driving up labor costs significantly. The second Trump term could see the reinstatement or further tightening of these policies, putting pressure on Indian firms to cut reliance on HIB visas.