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00:00Ladies and gentlemen, after a lot of uncertainty and chaos ensued over the H-1B visa hike issue,
00:05the Trump administration has issued a clarification that the $100,000 fee will be a one-time
00:11requirement. He also suggests that while introducing this policy move, he said that
00:16this is essentially to push companies to hire American workers. Now, clearly,
00:19not only does this impact how tech companies hire, but also their remittances. In fact,
00:24Citi, in its latest report, has suggested that the same. And in terms of an impact on IT companies,
00:30Citi expects no change to Indian IT's competitiveness in the global context. Meanwhile,
00:35India's Ministry of External Affairs reacted to the matter and stated in a statement that H-1B policy
00:40measure is likely to cause distress for families, and the government hopes that these disruptions can
00:45be addressed suitably by the United States authorities. So let's unpack this and understand
00:52what to make of this move, the expected growth trajectory for IT companies going forward.
00:56with our guest who's joining us now, Mr. Ganesh Natarajan, the executive chairman,
01:015F World and GTT Data is joining us. Thank you very much, Mr. Natarajan, for taking the time out
01:07and speaking to us here on ET. Now, first things first, the H-1B visa issue is not really a new one.
01:13It has bucked the industry earlier as well on several occasions for a very long period of time.
01:18We did see, however, the IT index get impacted today in trade on the back of this news.
01:23But what do you understand from your vantage point? Where do Indian companies stand as of today
01:29in context to this policy move that has come in from the U.S. administration?
01:33See, fortunately, I don't think we will be greatly affected. And I'll tell you why.
01:38Because over the last almost 20 years, the nature of the business has moved more and more towards
01:44offshore. There has been less reliance on sending young people to America to work on projects. So
01:49I think the whole staff augmentation business, which is where we started, has kind of completely
01:53tapered off. That's one. The second is, if you look at the numbers, I mean, okay, there are
01:58close to 300,000 people working on H-1B visas in the U.S. But as you rightly said, most of
02:04them are not affected because they are on current status. If you look at the new applicants and
02:08the new joiners from H-1 over the years, I think last year, the figure was around 60,000
02:14from India, which is from the Indian IT companies or from the India-centric companies was probably
02:19just about 10,000 as per the NASCOM data. So from that point of view, if you look at the
02:24industry size, I mean, we're talking about what close to 6 million people employed.
02:28And 10,000 people will have a problem of not being able to travel for IT companies. You
02:34can imagine the impact is not very high. Having said that, I mean, it is a downer for, you
02:39know, young people who have the American dream. They want to finish their engineering, join
02:43a company and immediately apply for an H-1. And I think that's going to be a bit of a sentiment
02:47problem, but more for the individual. And I would say less as a profit deleting or a profit
02:53affecting move for the industry itself.
02:59Right, Mr. Nusrajan, I believe that you're joining us live from New York. What's the sentiment
03:04in New York as far as Indians who are residing in the United States is concerned on the back
03:09of this policy that's been unveiled by the U.S. administration? In fact, several policies have
03:16been unveiled by the U.S. administration, which have not gone down well right here in India.
03:20But what's the sentiment that you're gathering from Indian, from the Indian community that's
03:25based in New York?
03:26See, the sentiment in the last three days, as you also know, has been jumping from, you
03:31know, extreme disappointment to, oh, a sense of relief. Because initially the perception
03:35was that somebody in the U.S. getting onto a plane may not be able to come back. Or somebody
03:40on H-1B, if they renew their visas, will have to pay $100,000. Fortunately, I think the
03:45White House and the U.S. administration has clarified all this. So I think the sentiment will
03:50be more of a downer for India. I mean, people who are, let's say, hoping to apply in the
03:54H-1 lottery in February this year and get approved and go off to the U.S. For them, it'll be
03:59a dampener because, I mean, it's not going to be easy to get companies to pay that additional
04:03$100,000 to get a very young person to America. But within the U.S., people who are working
04:07here, no cause for alarm whatsoever.
04:14Right, Mr. Natarajan, but does the United States have enough tech talent to replace these workers?
04:20And how do you think this is going to pan out, especially as far as the United States as a tech
04:24market is concerned?
04:26You know, I was having a discussion with my daughter yesterday. I mean, she's a U.S. citizen,
04:29works in the medicine area. And her perception was that this whole hype about America doesn't
04:36have enough talent is probably a little overdone because there are enough people graduating from
04:40the community colleges as well as the regular colleges and some very, very good institutions
04:46in America. So it is absolutely possible. And even Indian IT companies ourselves over the last 10
04:52years have been setting up centers in America, training young people for jobs. So I don't think
04:57there's that much of an issue. Sure, I mean, a bright Indian graduate who is coming to the U.S.,
05:02highly motivated, maybe missed or to a certain extent. But I don't think there's any panic
05:07button for any American company to say, oh, my goodness, I won't get the talent. The talent
05:12can be trained. And I think the move is there in America to train a lot more people for jobs
05:17in every industry.
05:21Right. Mr. Natarajan, let me move on and essentially move on to how companies have reacted
05:26to that policy move by the U.S. administration. In fact, companies and the communication suggests
05:30that the impact is likely to be minimal. And that's essentially what you also stated. But
05:34what will IT companies do furthermore to de-risk?
05:39Well, you will have to, I mean, you have to rethink your model all the time. And we have
05:43been doing that as an industry because the model today is doing work where it makes sense
05:47to do the work. I mean, if it's an implementation on site in any country, obviously people may have
05:52to be there. But if most of the work, whether it's a migration job or it's an AI implementation,
05:58most of it can be done by off-site. Because there's so many good telecommunication networks
06:04today that physical presence at a particular location is very, very unnecessary in most cases.
06:10So I wouldn't think, I think companies to answer your question will focus more on how do you do a
06:14multi-shore project implementation? And how do you minimize people having to travel from one country
06:20to the other, which to my mind is good for the company, is good for climate change, is good for
06:24everything.
06:28Right, Mr. Natharajan, and that does push the AI march even further. And of course,
06:32companies will have to quickly adapt and of course, integrate AI functioning into their
06:37business models. And that does also give a push to GCCs. We do hope that the government rolls out
06:42the GCC policy in the near term. But let me move on and ask you about, you know, the implementation
06:47of this policy that the Donald Trump administration has unveiled. How will it unfold, given the fact
06:53that Donald Trump's other policy moves have suffered implementation wars? So how do you expect
06:58this to pan out over a period of, let's just say, six to 12 months?
07:03See, I mean, I think the calendar is very obvious, because they are saying that for new applications
07:07from end of September onwards, this will be, this will kick in. So let's assume that September 30th
07:12onwards, $100,000 will have to be paid for every new applicant. This automatically expires in one
07:18year's time, end of September, by which time it can either be extended on a year-a-year basis,
07:23or it can be converted to a regular act by taking it through Congress and the Senate. So that's how
07:28it will play out. So if it is seen as a success by the administration, and their jobs, I mean,
07:33their goal obviously is to create more jobs for Americans. And if that is seen that, you know,
07:38the immigration has come down because of this policy, there will certainly be an extension.
07:42So I don't think this is going to go away. Whether it becomes a formal bill in the Congress,
07:48or it just gets extended by one more year or one more year after that, we'll have to wait and watch.
07:52So I think that's the calendar you're looking forward to.
07:56Right. Right, Mr. Natarajan. So this is a reality that Indian companies, and of course,
08:02Indians who are looking to go into the United States need to live with. But how do you see this move
08:07by the Trump administration, given the fact that this is coming in at a time when India and the
08:11United States are engaged in talks for a bilateral trade agreement? Minister Piyosh Goyal is in the
08:15United States. Will this sort of negotiation tactic, you know, this way of Donald Trump actually
08:21strong arming and trying to bully other countries, will this work on India?
08:26Well, that's a lot of allegations, so I don't know. But I really think that this has been coming
08:31in the sense that there has been a lot of discussion ever since Donald Trump became the president
08:36again in this term, that, you know, I mean, the whole make America great again, jobs for Americans,
08:42et cetera, has been part of the narrative in which he even won the presidency. So I don't think it's a
08:49sudden move. I do not think, but that's my personal opinion, that this is part of any negotiating tactic
08:54on the ongoing trade and tariff discussions. But yes, there is a lot of stuff up in the air.
08:59And I'm hoping that, you know, over time, because America is an amazing country,
09:04and it is probably the most attractive destination for work, for so many other things.
09:09So in that context, having a peaceful resolution to the tariff discussions, that's one. Second is
09:15making sure that, you know, we stabilize at how work can be done for American companies,
09:19because the American company needs Indian talent as much as Indian talent needs American companies.
09:24So I think, I'm very hopeful that by end of this calendar year, all this will settle down,
09:29and we'll find a new method of working, which works for everybody.
09:36Absolutely. And everybody's hoping that hopefully there will be some sort of stability as far as the
09:41United States administration is concerned. But sir, India in a statement has suggested that it
09:45hopes that this will be addressed suitably by the United States. But these protectionist policies,
09:50what will they end up yielding from countries like India and China in terms of reciprocal measures?
09:55Do you see more collaboration, for instance, happen on IT and tech talent between India and China?
10:02I doubt, honestly. I mean, having lived and, I'm not really looked, but worked
10:06with China for, across two of my previous jobs, Aptech and Zensar, I have great respect for China.
10:13But China also tends to be very inward looking in the sense that they will do what works for Chinese
10:20companies. But is there too much of collaborative possibilities in IT between India and China?
10:24I don't think so, honestly. I mean, it may come through the statements made by various people.
10:30But I think we will have to build our own partnerships, which we've always done,
10:33whether it's with the Western world or Southeast Asia or Middle East. At the same time, China,
10:37of course, very strong in semiconductors and artificial intelligence. They will find their own way.
10:41So I think there's going to be a healthy cooperation, but not too much of collaboration at this point.
10:46Not too much of collaboration, but a healthy competition is something that you are predicting
10:55as far as India and China ties are concerned. And of course, this entire tech story, the tech angle
11:00is concerned. But, sir, big corporate voices have been suggesting that it's perhaps time to head back
11:04home and build here, right here in India. But is that vision realistic?
11:09Well, it is realistic, of course. And I think the government is taking a lot of steps in terms
11:15of their whole, you know, the investments in research that you have seen over the last six
11:20months. I mean, a lot of announcement. It is a fact that we have been laggards as far as
11:24product is concerned. We need a product ecosystem where maybe 100 billion of Indian product, 100
11:29billion dollars of Indian products are consumed in India. And there's still a lot of reliance on global
11:33products. So without going to any jingoism in terms of only buy from India, etc., I think more
11:40and more good products coming out of India, more and more deliberate consumption of Indian products
11:45by Indian large companies and by individual consumers, I think that will help the market.
11:50Yes, surely. I mean, when we talk about Vixit Bharat, we need a lot more self-reliance. And from that point
11:55of view, here is an opportunity for entrepreneurs to build for India, build in India. And I'm hoping
12:00that will happen and will be a positive outcome of all the kind of flat world negation that's
12:05happening by everybody looking out for themselves.
12:11Absolutely. Mr. Nutshotton, we'll have to see how that manufacturing in India story really
12:16unfolds, even though we've seen that the government has given a push to manufacturing and made it
12:21India, but not just made it in India, made for the world as well. However, as far as technology
12:25is concerned, I'll just give you one example. When we talk about the semiconductor ecosystem,
12:29the kind of investments that are going on in China, in the United States, perhaps they far
12:34exceed what's happening currently in India on some of the aspects. We have been a little late to the
12:38party, for instance, the AI, a model that's already been developed by China, and of course,
12:45the United States first.
12:47No, that is very true. And again, but I'm glad that there are being steps being taken. If you look
12:51at a lot of the work being done in Neeti Aayog, for instance, I think there was an announcement of
12:57a multi-sectoral AI policy that just happened last week, which is quite amazing, and I think very,
13:03very progressive. What Minister Vaishnav has been talking about in terms of India's own attempts at AI
13:08are good. You're right, China has an amazing lead. They have amazing institutions, academic and research
13:13institutions. And I'm not saying that we are in any position to compete with China or the US in AI, but we are
13:19getting there. And very similar to what China did with DeepSeq and the inference model, which is as against the
13:25large language model or the LLM model. I think India has to find its place in the sun. We have always
13:30succeeded even in IT services because of a clear understanding of customer applications. So
13:36application-oriented AI, narrow language models, small language models, I think inferences, I think
13:41all these are going to be what India's play will be. And there's enough opportunity. I mean, AI is at
13:46very much a nascent stage in the industry. And I think if we grab our opportunities, we can really do
13:51very, very well in that area.
13:55Right, Mr. Nishajan, one final question before we let you go. In light of this new policy that's
14:01been unveiled by the US administration, what do you think is going to happen to graduates who are
14:06looking at that American dream or looking, who are perhaps looking at going into the United States
14:11and of course, working for some of the tech companies over there in the country? What really
14:15happens to those graduates?
14:18Honestly, if you ask me, and right now my focus is a lot of on the social sector and in talent
14:24management. And it is a worry. I mean, today the jobs are scarce in India. And I'm not even
14:29talking about the American dream, the Indian dream. I mean, many of us when we graduated from
14:33engineering or management, we had, you know, three job opportunities in our pocket and we had a
14:37freedom of choice. Today it's become a problem. I mean, today there's a lot of
14:41underemployment or unemployment. And I think we'll have to work in India to create job
14:45opportunities and not worry as much about the American dream as about creating an Indian
14:49dream that works for all, for every Indian as we go forward.
14:56Right, Mr. Nishajan, thank you very much on that note for taking the time out and speaking
15:00to us here on ET Now. All eyes will now be on the kind of policies that the Indian administration
15:05rolls out, the kind of policy push that it gives to companies and how innovators, our own
15:10techies really go on to innovate and make global products right here from India. Thank you very
15:17much, sir, once again for taking the time out.
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