India Market Watch: US H-1B Visa Debate Rocks IT Labor Pool, Canada FDI on High

February 7, 2017 Posted by India Briefing Reading Time: 4 minutes

Any US H-1B visa change to affect IT talent pool

The debate in the US over bills designed to tighten H-1B visa rules has become a cause for worry among many major Indian IT companies. While the operations of many multinationals will be impacted by tighter restrictions for the visa, the biggest impact for HR managers in India will be related to the availability and cost of talent.

Any tightening of the eligibility for H1B visas will affect hiring managers in India that utilize H-1B visa programs as an incentive for domestic employees and may cause a high number of Indian citizens to return to India from the US. The latter development will likely benefit hiring managers who have struggled with the high levels of competition for talent in India’s major business hubs.

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New Boeing engineering, technology center in Bangalore

Boeing, the multinational aerospace company, opened the Boeing India Engineering and Technology Center (BIETC) in Bangalore last week. The new center will provide data analytics, engineering, and IT services for the company’s global operations.

A spokesperson for Boeing said the company opened the center to take advantage of competitive operational costs as well as the talent available in the Bangalore area. These features have long attracted R&D as well as technology centers to Bangalore, but some US multinationals – such as Target – have also started experimenting with support for incubators and accelerators in the city.

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Investment from Canada reaching new heights

Canadian companies have invested between US$7 to 8 billion into India over the past two years, according to estimates by the Economic Times and Live Mint. This investment marks a drastic increase in FDI from Canada: Canada made investments totaling only US$613 million in 2015.

Real estate and infrastructure have been the target of the majority of Canada’s FDI into India. Canada-based pension and private equity funds have accounted for the bulk of this new wave of investment, following similar investments in years past by funds based in Singapore and the Middle East.

Despite the increase in FDI from Canada, and the consistent growth in bilateral trade between the countries, the Commerce and Industry Minister Nirmala Sitharaman recently announced that India would not enter into an economic and trade agreement promoted by Canada due to provisions outlining a permanent multilateral investment court.

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