Team Blitz India
AHEAD of the US Presidential elections when the noise around immigration policies is expected to increase, the Indian IT sector’s dependency on US visas is at a decade low as companies have transformed business models to mitigate risks of visa dependency, according to a report by BNP Paribas.
Going into the 2016 US presidential elections, India IT services companies’ dependency on US H-1B visas was high, resulting in a spike in the rejection rate to more than 40 per cent in 2017 from 13 per cent in 2016.
This disrupted the business models of many Indian IT Services companies. During the Biden regime, average annual rejection rate has fallen to 4.5 per cent, the lowest in the past 15 years. Despite this, dependency on US visas has continued to decline for Indian IT services companies.
There is also increased offshoring, a trend that Covidinduced lockdowns has further accelerated. The trend of falling visa dependency is being seen across most major IT Services and Engineering, Research & Development (ER&D) companies – both in percentage terms and absolute visa approvals/ applications.
Over the last decade, there has been a structural fall in the number of unemployed IT professionals in the US and the tech unemployment rate because of a sharp jump in well-paying tech jobs in the US.
Hence, there is limited appetite for insourcing IT services jobs. Moreover, the gap in income of a tech employee in the US and in India is approximately 4 times in dollar terms, making outsourcing to India lucrative, according to the report.
