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Visa curbs force U.S. firms to rethink labour strategies

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Work tied to AI, cybersecurity could shift to India

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GCCs maturing into innovation-led strategic hubs

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Proposed outsourcing tax could threaten service exports

By Sai Ishwarbharath B, Haripriya Suresh and Rishika Sadam

BENGALURU/HYDERABAD, Sept 30 (Reuters) - Donald Trump's

H-1B visa crackdown will hasten U.S. firms' shift of critical

work to India, turbocharging the growth of global capability

centres (GCCs) that handle operations from finance to research

and development, economists and industry insiders say.

The world's fifth-largest economy is home to 1,700 GCCs, or

more than half the global tally, having outgrown its tech

support origins to become a hub of high-value innovation in

areas from design of luxury car dashboards to drug discovery.

Trends such as growing adoption of artificial intelligence

and increasing curbs on visas are pushing U.S. firms to redraw

labour strategies, with GCCs in India emerging as resilient hubs

blending global skills with strong domestic leadership.

"GCCs are uniquely positioned for this moment. They serve as

a ready in-house engine," said Rohan Lobo, partner and GCC

industry leader at Deloitte India, who said he knew of several

U.S. firms reassessing their workforce needs.

"Plans are already underway" for such a shift, he added,

pointing to greater activity in areas such as financial services

and tech, and particularly among firms with exposure to U.S.

federal contracts.

Lobo said he expected GCCs to "take on more strategic,

innovation-led mandates" in time.

U.S. President Trump raised the cost of new H-1B visa

applications this month to $100,000, from an existing range of

$2,000 to $5,000, adding pressure on U.S. firms that relied on

skilled foreign workers to bridge critical talent gaps.

On Monday, U.S. senators reintroduced a bill to tighten

rules on the H-1B and L-1 worker visa programmes, targeting what

they called loopholes and abuse by major employers.

If Trump's visa curbs go unchallenged, industry experts

expect U.S. firms to shift high-end work tied to AI, product

development, cybersecurity, and analytics to their India GCCs,

choosing to keep strategic functions in-house over outsourcing.

Growing uncertainty fuelled by the recent changes has given

fresh impetus to discussions about shifting high-value work to

GCCs that many firms were already engaged in.

"There is a sense of urgency," said Lalit Ahuja, founder and

CEO of ANSR, which helped FedEx ( FDX ), Bristol-Myers Squibb ( BMY )

, Target ( TGT ) and Lowe's set up their GCCs.

REASSESSING INDIA STRATEGIES

Such a rush could lead to "extreme offshoring" in some

cases, said Ramkumar Ramamoorthy, a former managing director of

Cognizant India, adding that the COVID-19 pandemic had shown key

tech tasks could be done from anywhere.

Big Tech, including Amazon ( AMZN ), Microsoft ( MSFT ),

Apple ( AAPL ) and Google parent Alphabet, along with

Wall Street bank JPMorgan Chase ( JPM ) and retailer Walmart ( WMT )

, were among the top sponsors of H-1B visas, U.S.

government data showed.

All have major operations in India but did not want to

comment as the issue is a politically sensitive one.

"Either more roles will move to India, or corporations will

near-shore them to Mexico or Colombia. Canada could also take

advantage," said the India head of a retail GCC.

Even before Trump's hefty fee on new H1-B visa applications

and plan for a new selection process to favour the better-paid,

India was projected to host the GCCs of more than 2,200

companies by 2030, with a market size nearing $100 billion.

"This whole 'gold rush' will only get accelerated," Ahuja

said.

IMPLICATIONS FOR INDIA

Others were more skeptical, preferring a "wait and watch"

approach, especially as U.S. firms could face a 25% tax for

outsourcing work overseas if the proposed HIRE Act is passed,

bringing significant disruption in India's exports of services.

"For now, we are observing and studying, and being ready for

outcomes," said the India head of a U.S. drugmaker's GCC.

India-U.S. trade tension has spilled into services from

goods, with visa curbs and the proposed HIRE Act threatening to

reduce India's lower-cost edge and choke cross-border flows of

services.

While the $283-billion IT industry that contributes nearly

8% of India's GDP may feel the strain, surging demand for GCC

services could cushion such a blow, however.

"Lost revenues from H-1B visa reliant businesses could be

somewhat supplanted by higher services exports through GCCs, as

U.S.-based firms look to bypass immigration restrictions to

outsource talent," Nomura analysts said in a research note last

week.