- Experts predict 60% increase in number of global capability centers of foreign companies in India in two-three years
After imposing a huge tariff of 50% on India, US President Donald Trump has increased the fee on H-1B visa for foreign professionals to $100,000. This decision of Trump has dealt the biggest blow to Indians, as 70% of professionals working in American companies are Indians. However, experts believe that India has benefited more than lost due to Trump’s restrictions. As many as 1700 American companies are turning to India for their offshoring operations after Trump drastically increased the H-1B visa fee. They are taking advantage of the global capability centers located in India.
The Trump administration earlier this month signed an executive order increasing the fee for H-1B visa applications for talented professionals imported from abroad by 70 times from $1,500-4,000 to $100,000. The Trump administration had increased the H-1B visa fee by claiming that American jobs were being taken away and national security.
However, Trump’s decision could be more harmful than beneficial for the US. Experts believe that there is a sharp rise in Global Capability Centers (GCCs) in India. Instead of getting IT professionals to work in the US, American companies are adopting a new way of offshore scaling. Companies like McKinsey and ANSR believe that the number of GCCs in India could increase by 60 percent in the next two to three years.
Any multinational company has offshore offices in other countries, including India, in addition to its headquarters.
Earlier, multinational companies used to outsource IT support, customer service, accounting, back office work. That is, they used to give work to third-party companies like TCS, Infosys, Wipro. But now companies are adopting the trend of opening their own offices abroad, so that instead of calling foreign professionals to the US through H-1B visa, companies can hire local talent in India.
GCC companies have a model in which instead of spending money on outsourcing, they will directly open their offices in talent-rich countries like India, so that they will save on overhead costs, have more control and they will get the benefit of innovation. This is a big opportunity for India, because the combination of IT skills and overhead here makes companies attractive for GCC setup.
Currently, there are approximately 1700 GCCs operating in India, which is more than half of the number of global GCCs in the world. More than 1.7 million people work in this GCC. Only 30 percent of Fortune 500 companies have GCCs in India. This means that there are still many opportunities for GCC development in India.
