Catch a bully by its horns: How India can turn the latest round of US visa curbs affecting Indian techies to its advantage

Import people or export work' was a stark fact conveyed by Nasscom to a top US official and several Congressmen at the time of the first 'outsourcing backlash' in the early 2000s. It reached a crescendo in 2003-04 and was an important issue in that year's US presidential election campaigning.

It did end soon after polls, as more people understood the win-win India-US IT relationship. Consequently - despite continuing battles - things on the visa front did become easier for Indian IT companies. The vast improvement in political ties post-2004, too, helped.

Now, there is a new reality, with India-US ties sinking lower by the day, more precipitously after Operation Sindoor last year. A few days back, the US added one more irritant that could further worsen overall ties. It not only made allegations against eminent Indian IT companies but also disallowed them from PERM (Permanent Labour Certification Programme). J D Vance even added some nasty words about Indian IT workers in the US.



PERM enables employers to apply to move their H-1B employees to a more permanent visa. For many, and for long, this was their dream path, possibly leading to a 'green card', even US citizenship. At the company level, the US allegations pose reputational challenges, especially given their standing as well-governed organisations. But work-wise, closing of this visa will hardly affect them. One commentator estimates that last year, only 1,400 applications, of a total of almost 1.2 lakh, for PERM were from Indian IT companies.

The overall impact on the industry and country will be, at best, marginal. But for individuals who may have taken loans or mortgages in the expectation of a long-term/permanent visa-enabling future dollar-earnings stream, this will be a major jolt. Most will now have to return to India.

This will also affect the many others who looked at this as a possible future path. Already, other visa restrictions - on post-education work visas through the OPT (optional practical training) window - are leading to more Indian students returning, some with degrees from top US institutions. Those already working there are now worried about visa extensions and long-term prospects.

For India, this returning stream presents extraordinary opportunities. At a time when emerging technologies like AI, quantum, genetics and space require high-order talent, 'brain gain' from returnees provides a quick-fix solution, even as we, hopefully, undertake major educational reforms to upgrade the terrible state of our education infrastructure and system. For this opportunity, we must thank the US.

The $315 bn industry is vital for India. It employs 6 mn directly, and ~10 mn indirectly. It's also India's biggest forex earner. The US accounts for $150 bn of the industry's $250 bn exports. While remote delivery and AI have advanced, we still need to send people to deliver services. Given this, it may not be unintentional that Indian IT is in the crosshairs of the Trump regime. We need our own leverage.

For this, at the broader level of overall India-US ties, we could take 4 key steps:

The US has, as part of its sanctions, threatened to impose penal tariffs on Indian exports if we continue to buy Russian oil (never mind that US will now import Russian diesel). So far, India has, at least in formal statements, resisted this, though it seems to have cut back on Russian oil imports. In retaliation, India could impose sanctions - limited to specific companies - on those exporting arms to Pakistan, a declared enemy.

Air travel in and from India is seeing a boom. As a result, hundreds of new aircraft will be ordered in the next few years. We could ensure, through appropriate formal or informal means, that the orders are placed with Airbus and other non-US companies.

Almost any military equipment can now be sourced from two or more countries. Today, India is a large, growing and attractive market for foreign suppliers, despite increasing indigenisation. For whatever is being procured from abroad, we could ensure that US companies are not among our suppliers.

In any case, US equipment is generally the most expensive and unreliable in terms of future supplies of spares and upgrades. The same is true of nuclear power plants where it will be wise to stay away from US equipment.

Negotiations on the Indo-US trade deal must include a proviso for free movement of people for delivering of contracted services. This is distinct from immigration or long-term visas.

None of this needs to be actually done. But these are weapons in our armoury, which the US must be made aware of, to be used selectively, if and when appropriate. Of course, their efficacy depends on 3 things that will give us leverage:

A strong indigenous tech base.

Good relations with alternative suppliers, including Europe, Japan, South Korea and Russia.

A non-antagonistic - if not cooperative - relationship with China.

It is well known that placating a bully never works. The demands keep escalating. Standing up often makes the bully behave better. We have recent evidence of this in concrete terms: procurement of S-400 anti-aircraft missile systems from Russia - that played a crucial role in Operation Sindoor - which the US was pressurising us to cancel, and the continuing import of Russian oil. Our refusal to back down in both cases led to a US back off.

Finally, if all else fails, we can play the trump card of offering the expertise and know-how of our Election Commission to ensure a Trump victory in the US mid-term elections next month.