Another blow for Indian IT as Australia tightens visa norms

In a strong blow to Indian immigrants, Australia has joined the growing list of countries that have cracked down on skilled but cheap foreign labour.

Published: 19th April 2017 05:03 AM  |   Last Updated: 20th April 2017 08:28 AM   |  A+A-

Australian Prime Minister Malcolm Turnbull | Reuters File Photo

By Express News Service

CHENNAI: In a strong blow to Indian immigrants, Australia has joined the growing list of countries that have cracked down on skilled but cheap foreign labour. The move comes even as US President Donald Trump is set to sign an executive order to overhaul the H1B visa programme. So far, four countries — UK, US, Singapore and Australia — have announced a crackdown on foreign workers taking up local jobs.

In effect, if not in intent, the global trend of protectionism has begun denting prospects of the Indian IT sector. Just like with the US, India is also the largest beneficiary of Australia’s 457-visa programme, that is now being abolished. Australian Prime Minister Malcolm Turnbull, while announcing the move, even mirrored the rhetoric of his US counterpart Donald Trump. “The new visa regime that replaces 457-visa programme would put jobs first and Australia first,” he said. “Our reforms will have a simple focus: Australian jobs and Australian values.”

The blow, coming after the UK, US and Singapore crackdown, is only set to make matters worse for Indian IT companies, which have significant exposure to all the markets. While the US and Canada accounted for nearly 60 per cent of all software exports, the Australia and New Zealand region accounted for 3.4 per cent in 2015-16, according to the RBI.

“This is part of an ongoing global trend and is not surprising. Indian companies will have to begin reworking business models and start hiring more locally, to do business remotely,” pointed out Raja Lahiri, IT analyst, Grant Thornton India.

However, this is set to make matters worse for companies in the next few quarters. “There will definitely be an impact on margins and revenue. The cumulative impact is going to be big because the four countries and the regions they cater to account for a majority of Indian IT export markets (more than 70 per cent),” said the director of a leading Indian IT firm.


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