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Indian companies have long depended on the H-1B visa program as a key part of their global strategy, especially in the tech and IT services sectors. This program has helped bridge the gap between India's vast talent pool and the growing demand for highly skilled professionals in the U.S.

IT giants like Infosys, TCS, Wipro, and HCL have leveraged the program to send top talent on-site, ensuring seamless project delivery, client satisfaction, and knowledge transfer. Having experts at client locations has strengthened relationships by enabling better communication, faster problem-solving, and deeper trust—critical factors in IT consulting and software development.

Beyond operational efficiency, the program has fueled innovation by allowing Indian professionals to contribute to cutting-edge fields like artificial intelligence, cloud computing, data analytics, and cybersecurity. This cross-border exchange of expertise has benefited both Indian firms and the U.S. tech ecosystem.

The H-1B program has also given Indian companies a competitive edge, enabling them to remain cost-effective while deploying specialized talent. However, with shifting policies and tighter H-1B regulations, many firms are now adapting by hiring locally, investing in nearshore delivery centers, and embracing remote work. These strategic shifts reflect their resilience and ingenuity as they navigate an evolving immigration landscape while continuing to drive economic and technological growth.

Impact of policy changes on H-1B program

One major adaptation has been a reduced reliance on H-1B visas, primarily through increased local hiring in the U.S. Infosys now has over 60% of its U.S. workforce composed of local hires, while TCS exceeds 50%. This shift helps minimize the risks associated with visa uncertainties. Additionally, companies are exploring nearshore delivery centers in Canada and Mexico while enhancing offshore operations in India to lessen their dependence on U.S.-based deployments.

Operational and financial implications have also emerged, with proposed changes such as higher wage requirements and additional fees increasing costs for Indian IT firms. These higher expenses could shrink margins on U.S. projects. To counteract this, companies focus on high-margin services, upskilling employees in AI and cloud computing, and optimizing remote work models to enhance efficiency.

The return of the Trump administration has further raised concerns about stricter H-1B policies, including higher wage thresholds and prioritization of U.S.-educated applicants. However, Indian IT firms are better positioned to adapt due to their reduced dependency on H-1B visas and diversified strategies.

Many are also expanding into new markets and investing in domestic initiatives like "Start Up India" and "Digital India" to decrease reliance on the U.S. market.

Despite the potential for operational disruptions, Indian IT firms have been proactive in scaling up local hiring and exploring alternative delivery models to minimize negative impacts. Their emphasis on innovation and strategic adaptations ensures they remain competitive and positioned for long-term growth in an evolving global landscape.

Indian professionals in STEM fields

Indian professionals, particularly those in STEM fields, are facing significant challenges due to increasing visa restrictions in the U.S. Stricter regulations and heightened scrutiny has extended the visa application process, creating uncertainty for those seeking to work in the U.S. This unpredictability affects career planning and stability, making it difficult for professionals to secure long-term opportunities. Potential reforms or restrictions on the Optional Practical Training (OPT) program, a key pathway for STEM graduates, may further limit post-graduation work opportunities.

Tighter visa policies have also impacted career advancement by reducing job opportunities for Indian STEM professionals in the U.S., forcing many to consider alternative destinations like Canada or the EU. With immigration hurdles increasing, many Indian professionals are shifting to countries with more favorable policies, potentially leading to a brain drain from the U.S.

These restrictions could have broader economic and innovation implications. The U.S. tech industry, which relies heavily on skilled foreign workers, including Indians, may experience slower growth if restrictive policies hinder the influx of top talent. Meanwhile, other countries are capitalizing on this shift by streamlining immigration processes to attract skilled professionals, intensifying global competition for talent.

In response, Indian professionals are adapting by diversifying their career paths, focusing on emerging fields such as AI and cybersecurity, where demand remains strong worldwide. Some are also exploring entrepreneurship and self-sponsorship options, leveraging their expertise to create opportunities in both the U.S. and India.

Indians choosing Canada, Australia over U.S.?

There is a growing trend of Indian talent choosing Canada or Australia over the U.S., driven by several key factors, particularly immigration policies, job opportunities, and quality of life.

Canada has become an attractive destination due to its welcoming immigration policies, such as Express Entry and Provincial Nominee Programs, which offer a straightforward pathway to permanent residency. Similarly, Australia provides clear pathways through the General Skilled Migration (GSM) program and employer-sponsored visas, making it easier for skilled Indian professionals to settle and secure long-term opportunities.

Job prospects and economic stability also play a crucial role in this shift. While Canada offers opportunities in sectors like healthcare and technology, some immigrants face challenges related to underemployment. In contrast, Australia's robust economy provides diverse job opportunities across IT, healthcare, and education, ensuring better long-term career prospects for skilled workers.

Post-study work opportunities are another major draw. Canada provides up to three years of post-graduate work permits, allowing international students to gain valuable work experience. Meanwhile, Australia has introduced initiatives like the MATES visa, offering two-year work opportunities for Indian graduates from top universities.

Beyond career prospects, quality of life and cultural adaptation influence migration decisions. Canada's multicultural society and high living standards make it easier for Indian immigrants to integrate. Likewise, Australia's inclusive society, excellent healthcare, and strong quality of life align well with the expectations of Indian professionals seeking a stable future.

The role of H-1B visa in Ind-US economic relations

One of its key functions is bridging the skills gap in the U.S. tech industry by bringing in highly skilled professionals from India. These workers contribute significantly to innovation and growth in AI, cloud computing, and data analytics. The program also enhances economic collaboration between the two countries, as Indian talent fuels U.S. economic growth while Indian companies gain access to global markets and technologies. Additionally, Indian IT firms have made substantial investments in the U.S., with over $1.1 billion dedicated to local upskilling initiatives, benefiting more than 255,000 employees and 2.9 million students, thus supporting job creation and strengthening bilateral economic relations.

However, restrictions on H-1B visas could have far-reaching consequences. A talent shortage in the U.S. tech sector is already a concern, with a projected shortfall of over a million tech workers by 2033. Limiting access to skilled foreign professionals could hinder innovation and slow economic growth. U.S. companies that rely on Indian tech talent might also face a competitive disadvantage if they cannot access specialized skills, potentially leading to slower technological advancements and reduced global competitiveness.

Strategic alternatives for Indian firms

Nearshore delivery centers have become a strategic alternative for Indian firms, particularly in locations like Mexico and Canada. They help them adapt to changing visa policies and market demands while maintaining efficiency and competitiveness.

Mexico offers proximity to the U.S. market, similar time zones, and cultural familiarity, which enhance collaboration and reduce delivery times. As a participant in the USMCA, Mexico also provides seamless trade with the U.S. and Canada, creating a stable environment for nearshore operations. Meanwhile, Canada is an attractive alternative due to its flexible immigration policies and easy access to the U.S. market, allowing Indian companies to operate without the same visa challenges.

Cost efficiency and talent access are additional benefits. Nearshore centers allow Indian firms to maintain lower operational costs than the U.S. while accessing skilled talent in these regions. The growing talent pool in Mexico and Canada is particularly valuable for IT and tech services, ensuring companies can continue delivering high-quality solutions to clients.

Major Indian IT firms like TCS, Infosys, and Wipro are expanding their nearshore presence in these regions to reduce their reliance on H-1B visas and enhance client proximity. This strategy enables them to remain competitive by ensuring smooth service delivery while navigating visa restrictions.
By establishing nearshore centers, Indian companies diversify their operational footprint, ensuring greater flexibility in response to changing market conditions and regulatory environments.

This article is written by Karan S Thukral and has been formulated with the research of his junior associate lawyers. Karan S Thukral handles matters relating to Inter-Country laws and regulations. He runs a law firm in Delhi called Thukral Law Associates.

(The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of New India Abroad)