Roving Periscope: Trump’s visa curbs may push companies’ key work to India
Virendra Pandit
New Delhi: US President Donald Trump’s H-1B visa crackdown may hasten American firms’ shift of critical work to India, spurring the growth of Global Capability Centres (GCCs), which handle critical operations from finance to research and development, the media reported on Tuesday.
Current trends like growing adoption of artificial intelligence (AI) and increasing curbs on visas are pushing US firms to redraw labour strategies, with India-based GCCs emerging as resilient hubs blending global skills with strong domestic leadership.
India, currently the world’s fifth-largest economy, is home to nearly 1,700 GCCs, or more than half of the global tally, having outgrown its technology support origins to become a hub of high-value innovation in key areas such as designing luxury car dashboards to drug discovery.
The reports, quoting Rohan Lobo, partner and GCC industry leader at Deloitte India, said several US firms are reassessing their workforce needs. “GCCs are uniquely positioned for this moment. They serve as a ready in-house engine.”
“Plans are already underway” for such relocating workforce,” he said, hinting at areas like financial services and technology, particularly among firms with exposure to US federal contracts.
Recently, President Trump raised one-time fee of new H-1B visa applications from an existing range of USD 2,000 to USD 5,000 (Rs.1.76 lakh to Rs. 4.40 lakh) to USD 100,000 (Rs. 88 lakh). This sudden move mounted pressure on US firms that relied on skilled foreign workers to bridge critical talent gaps at an affordable price.
Again, on Monday, US senators reintroduced a bill in Congress to tighten rules on the H-1B and L-1 worker visa programmes, targeting alleged loopholes and abuse by major employers.
If the US courts favour these visa curbs, some firms may shift high-end work tied to AI, product development, cybersecurity, and analytics to their India-based GCCs, and keep strategic functions in-house over outsourcing.
Mounting uncertainty fuelled by the recent changes has given fresh impetus to discussions about shifting high-value work to GCCs that many firms were already engaged in.
“There is a sense of urgency,” said Lalit Ahuja, founder and CEO of ANSR, which helped companies like FedEx, Bristol-Myers Squibb, Target and Lowe’s to set up their GCCs.
This rush could lead to “extreme offshoring” in some cases, according to Ramkumar Ramamoorthy, a former managing director of Cognizant India. He said that the COVID-19 pandemic demonstrated how key technology tasks could be done from anywhere.
According to the US government data, multinational technology firms like Amazon, Microsoft, Apple and Google’s parent Alphabet, as also Wall Street bank JPMorgan Chase and retailer Walmart, were among the top sponsors of H-1B visas. They all have major operations in India.
Even before President Trump’s exorbitant fee on new H-1B visa applications and plan for a new selection process to favour the better-paid, India was projected to host the GCCs of more than 2,200 companies by 2030, with a market size nearing USD 100 billion.
“This whole ‘gold rush’ will only get accelerated,” Ahuja said.
Some US companies are unsure as they could face a 25 percent tax for outsourcing work overseas if the proposed HIRE Act is passed. This could bring significant disruption in India’s exports of services.
While the two countries are still negotiating a trade deal, the bilateral India-US trade tension has spilled into services from goods, with visa curbs and the proposed HIRE Act threatening to reduce India’s lower-cost edge and choke cross-border flows of services.
India’s USD 283-billion IT industry contributes nearly 8 percent to the country’s GDP. It may feel the strain, but surging demand for GCC services could cushion such a blow.
“Lost revenues from H-1B visa reliant businesses could be somewhat supplanted by higher services exports through GCCs, as US-based firms look to bypass immigration restrictions to outsource talent,” Nomura analysts said in a research note last week.
