April 1, 2017 2:00 pm JST

Indians wonder whether a job in the US is still worth it

Growing climate of discrimination may outweigh economic advantages

ROSEMARY MARANDI, Nikkei staff writer

A smog-choked roadway in Delhi: The outlook has become hazier for Indians harboring hopes of working in the U.S. © Getty Images

MUMBAI -- For Abhishek Maloo's family, living in Bhilwara, a small town in India's western desert state of Rajasthan, their son's nine-year stint in the U.S. has been a blessing.

While they are not dependent on the cash he sends home, the money Abhishek earns as an IT professional has helped give the family a better life. He supported his younger brother's business management studies, and surprised the family by buying them a car.

Abhishek also set up a scholarship at the college where he earned his engineering degree, helping one student each year with tuition fees. He and his family have been reluctant to speak publicly about the matter, but the remittances Abhishek has sent back to India have benefited not just them but also the community.

A similar story can be found in the Indian city of Kanpur. S.K. Pandey is a retired bank employee whose son has lived in California for the past five years. In that short time, he has earned enough money to make a down payment on property and to make payments on a housing loan.

"We are just happy he is able to lead a better life and invest in assets in India for the future. We don't really need his money, and are happy for his success," Pandey said. "We wish for his safety and well-being. That's all."

Souring situation

The Maloo and Pandey families are increasingly worried about the Trump administration's anti-immigration rhetoric and talk of tightening the rules for H-1B visas for skilled workers. Their sons, however, remain confident that the U.S. government will not target them.

Hopefully that turns out to be the case, for India's sake. Remittances contribute significantly to the country's economy and to the lives of its citizens.

India receives more remittances than any other country, totaling nearly $69 billion in 2015, according to World Bank data. It was followed by China, at almost $64 billion, and the Philippines, at $28 billion. From the U.S. alone, India received $11.7 billion in remittances, making it the second-biggest source of such transactions after the United Arab Emirates. India's dependency on inward remittances peaked in 2008, when the total inflow of nearly $50 billion was equivalent to 4.1% of gross domestic product. That ratio was an estimated 3.3% in 2015, still much higher than it was in the 1990s.

According to Yes Bank Chief Economist Shubhada Rao, a large majority of these remittances are used for supporting family. The next most common use is for deposits in bank accounts, with a relatively smaller share invested in land or equity markets.

Indian nationals receive about 70% of H-1B work visas issued in the U.S., and more than 50% are working at IT outsourcing companies.

The administration under President Donald Trump, focused on promoting domestic industry, has proposed changing the H-1B visa regime to encourage companies to hire locally. Ratings agency ICRA reckons such a move could hamper the growth of India's services exports and crimp remittance inflows.

"Global trends do not augur well for a significant improvement in the services trade surplus and remittances in FY2018 [the financial year ending next March], from the levels in FY2017," it said in a recent note. This could contribute to an expansion in India's current account deficit to $30 billion, or 1.2% of GDP, in the financial year ending March, up from around $20 billion a year ago.

India's $146 billion IT services industry, which includes such global payers as Infosys, Tata Consultancy Services, Wipro and HCL Technologies, relies on the U.S. for around 60% of its revenue. These companies, which sponsor a large number of visas for Indian nationals working in America, seem to be rethinking their strategies. Infosys, India's second-largest software services exporter, has reportedly decided to not apply for any U.S. work visas for junior-level staff members this year.

"We expected the negative impact on Indian companies, in particular IT companies, which are the major users of H-1B visas, to be limited by the high skill level associated with this sector, which is not easily replaceable, enabling Indian companies to maintain their edge," it said.

For many Indians, however, their biggest concern is not the economy but personal safety, particularly given the recent attacks on Indians in the U.S. New Delhi is working hard to maintain smooth, prosperous ties between the two countries, but with its citizens' growing antipathy toward the Trump administration, striking the right diplomatic tone may not be easy.

Nikkei staff writer Yuji Kuronuma in New Delhi contributed to this article.

Asia300

Infosys Ltd.

India

Market(Ticker): BOM(500209)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 35,391.44M
Shares: 2,296.94M
Asia300

Tata Consultancy Services Ltd.

India

Market(Ticker): BOM(532540)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 75,364.84M
Shares: 1,914.28M
Asia300

Wipro Ltd.

India

Market(Ticker): BOM(507685)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 22,073.94M
Shares: 4,866.40M
Asia300

HCL Technologies Ltd.

India

Market(Ticker): BOM(532281)
Sector:
Industry:
Technology Services
Information Technology Services
Market cap(USD): 19,540.41M
Shares: 1,391.98M

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