What was at first only expressed by experts and analysts has finally come from the horse’s mouth: Donald Trump is bad for business, according to Indian IT firm Wipro.
In its annual filing with the Securities and Exchange Commission (SEC), the American capital markets regulator, Wipro specified that the US president’s protectionist and anti-immigration policies could drag down its revenue. This is the first time an Indian IT company has explicity labelled Trump’s “America First” approach as a threat.
“Significant developments stemming from the recent US presidential election could have a material adverse effect on our business,” Wipro said in the document, which was filed on June 02. In a section detailing potential business threats, India’s third-largest IT services firm noted:
On November 8, 2016, Mr. Donald J. Trump was elected the next president of the United States. As a candidate, President Trump and his administration expressed support for policies impacting existing trade agreements, like North America Free trade agreement (“NAFTA”), and proposed trade agreements, and promoting greater restrictions on free trade generally and significant increases on tariffs on goods imported into the United States. Changes in US social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently operate could adversely affect our business.
The US is a key market for Wipro but tighter immigration laws could make it harder to get work visas for its employees, the company noted. Top Indian IT firms get over 60% of their revenue from the US. Wipro makes over 50% from the Americas, including the US.
Over the past few months, Trump’s anti-immigrant stance has raised concerns over the availability of the H-1B work visa, which is commonly used by software companies like Wipro to keep costs down by bringing Indian techies to the US. Here’s what the company had to say about immigration:
There have been and will continue to be calls for extensive changes to US immigration laws regarding the admission of highly-skilled temporary and permanent workers. There are some legislative proposals which, if passed and signed into law, could add further costs and/or restrictions to some of the high-skilled temporary worker categories and in turn, our cost of doing business in the United States may increase further and that may discourage customers from seeking our services.
The firm added that while it had a significant number of employees with valid work visas in the US, it will now increase local hiring in the country. This comes after India’s second-largest IT services firm, Infosys, announced it would hire 10,000 Americans over the next two years.
With other key markets such as the UK, Singapore, and Australia also tightening immigration laws, implementing higher salary thresholds and tougher rules for employment permits, Wipro said it could expect even more costs ahead.
“A few countries have introduced new provisions and standards in immigration law which can impact our ability to provide services in those countries due to restrictive policies and additional costs involved,” it said.