Indian IT companies have a reason to celebrate—and their investors are not holding back.
Joe Biden’s win has come as a relief after nearly four years of looming uncertainty thanks to Donald Trump’s protectionist stance.
Even before the US elections were called in favour of Biden on Nov. 7, shares of Indian IT companies had started inching up. Today (Nov. 9), in the first trading session since the US election outcome, the National Stock Exchange’s NSE IT Index continued its climb.
The Nifty IT index represents 10 firms including Infosys, Tata Consultancy Services (TCS), Tech Mahindra, and Wipro. Many of them were trading at prices close to their 52-week highs.
In the buildup to the election, the sector has mostly been a silent spectator since its business interests were on the line. The nearly $200-billion industry gets almost 70% of its revenue from the North American region.
Nasscom, India’s IT trade industry lobby which represents over 3,350 companies, said its members work with over three-quarters of the Fortune 500 companies in the US, “providing them vital technology services and helping them innovate, compete, and grow.” Tech has been a key contributor to India-US bilateral trade, which increased by over 400% between 2005 and 2019 to $149 billion.
Indian IT companies have long been dependent on the coveted H-1B visa to send talent to the US, but the programme has been under fire during the Trump administration.
During Trump’s tenure, techies from India and their families have faced several hardships with a barrage of unsettling policy moves. Adjusting to the more hostile climate, India’s IT majors like Infosys and TCS ramped up local hiring and reduce H-1B visa dependency. But Trump’s attacks were only getting more crippling, judging by the June suspension on H-1B visas and a significant overhaul of the programme in October.
Experts had predicted that, whatever the outcome, India would emerge a winner. In mid-October, Infosys CEO Salil Parekh had noted the company’s business model was resilient and would be unaffected by US election results.
However, there’s no denying that a Biden presidency is a more optimistic outcome for H-1B holders and aspirants given his softer tone on immigration. The winner of the 2020 presidential race has promised to lift the H-1B ban immediately. And he has made a number of promises on immigration, including increasing the number of employment-based visas issued each year and scrapping the country caps on the green card.
“Nasscom looks forward to working together with the new US Administration, to find solutions to the STEM skills gap, and enable America to be more competitive, to grow and create more jobs,” the Indian IT industry body said on Nov. 8.