Protectionism Won't Create Jobs: Nasscom On Trump's Remarks

New Delhi: Stressing that "blind protectionism" will not help in creating jobs, IT industry body Nasscom has said it will reach out to the new American administration to further highlight the key role played by Indian companies in keeping their economy competitive.

The comments come in the backdrop of US President-elect Donald Trump's statement on visa related issues at a rally in Michigan last week. He said one of his first executive orders after assuming office next month would be to order investigation into all visas abuses.

Industry watchers say this could mean that foreigner workers, including Indians, may face tough scrutiny under his administration.

"Trump is pro-business in his basic approach and as a businessman he will recognise that the only way you can create jobs in the US is for US corporates to be economically competitive. We hope Trump will understand that blind protectionism is not something that will create jobs, on the contrary it will lead to loss of jobs," Nasscom President R Chandrashekhar told PTI.

He added that the Indian IT sector is hopeful that any decision that is taken "is based on the consideration of full facts".

Stating that Nasscom is watching the developments, Chandrashekhar said it is a "myth" that a company does "one-to-one replacement" to perform the same task at lower cost.

"The reality is different. Indian companies help to revamp and transform organisations and processes by using disruptive and innovative technologies. We hope that a holistic view is taken," he added.

Pointing out that the new Trump administration takes charge next month, Chandrashekhar said Nasscom "will reach out to new administration to convey its views".

During his presidential campaign, Trump had emphasised on tightening immigration and criticised companies that ship jobs
overseas to countries like India and China.

At the Michigan rally, Trump said he had spent time with American workers who were laid off and forced to train foreign workers that were brought in to replace them.

While he did not take any names, Trump was apparently referring to cases like that of Disney World and other American companies wherein people hired on H-1B visas, including Indians, displaced US workers.

The $110-billion Indian IT services sector, which gets about 60 per cent of its revenues from the US, has been gradually ramping up local hiring as a measure to protect its business. This is an expensive route as manpower costs more compared to those in places like India and China and will impact margins of the service providers, industry experts said.

India companies like Infosys and TCS have also been aggressively expanding their STEM programmes to create more skilled manpower in the US.

"The kind of services that Indian IT industry provides in the US is a combination of new technology requiring different set of skills, applied to transform American businesses and to make them more competitive and in turn enable them to create jobs," Chandrashekhar said.