How can Donald Trump's H-1B visa rule create more jobs in India

Experts have predicted that Donald Trump's H-1B visa crackdown will force US firms to shift criticalwork to India. Earlier this month, in a move to secure tech jobs for locals in the US, Trump imposed a hefty H-1B visa fee of $100,000. Trump's move will turbocharge the growth of global capability centres (GCCs) that handle operations from finance to research and development.

Amid the pressure of the rapid adoption of artificial intelligence and the US administration's curbs on visas, GCCs in India have emerged as a resilient option for American companies.

Rohan Lobo, partner and GCC industry leader at Deloitte India, told Reuters that these centres can serve as a ready in-house engine.

For the shift of US companies, he said, plans are in place, especially in areas like financial services and tech, and particularly among firms with exposure to US federal contracts.

Trump's move has made hiring talent from countries like India less cost-effective. For instance, the visa fee used to be between $2,000 and $5,000. By making the fee $100,000, the administration has made hiring local talent more tenable than importing talent from abroad.

However, this strategy can also make the talent gap wider.

On Monday, US senators reintroduced a bill to tighten rules on the H-1B and L-1 worker visa programmes, targeting what they called loopholes and abuse by major employers.

If Trump's visa curbs are unchallenged in courts, US firms may be forced to shift high-end work tied to AI, product development, cybersecurity, and analytics to their GCCs in India.

Ramkumar Ramamoorthy, a former managing director of Cognizant India, said that the move could result in what he described as "extreme offshoring".

A head of the GCC said that either the roles will be shifted to India or they will have to rely on countries like Mexico, Colombia, and Canada.

However, a lurking danger for these firms is that if the HIRE Act is passed, they may have to pay 25 per cent tax on outsourcing work.

India's $283-billion IT industry is being strained by Trump's visa move. However, the demand for GCC services can cushion the blow.