Industry body Nasscom on Thursday said New Zealand’s move to tighten its work permit norms will not have any “tangible” impact on the Indian IT industry that gets less than 1 per cent revenue from that market. “The Indian IT industry does not have a significant presence in New Zealand… The region accounts for less than one per cent of the overall export basket. So, there will be no tangible implication for the industry as a whole,” Nasscom President R Chandrashekhar told PTI.
The curbs by New Zealand may not seem damaging on a standalone basis, but coupled with similar moves by Australia, Singapore and the US, the industry could be staring at elevated operational costs and higher scrutiny going forward. Indian IT companies get over 60 per cent of their revenues from the North American market, about 20 per cent from Europe and the remaining from the other economies. “We are essentially seeing that countries are trying to define skilled workers more precisely and bring curbs on immigration while opening the doors for high-skilled workers,” Chandrashekhar pointed out.
New Zealand will introduce tougher norms for skilled overseas workers as it seeks to control the number of immigrants and improve the quality. Immigrants will need to get a job in which they earn at least the median income in order to qualify as a skilled worker, while the highly skilled ones would need to earn at least 150 per cent of the median income.
However, crafting such a definition could be easier said than done as using salaries or skill sets as a metric may come with its own set of challenges. “The skill sets requirements are dynamic and changing in this industry,” said the Nasscom chief. Over the past few weeks, there is a growing sentiment of protectionism across various markets that are seeking to safegaurd jobs for locals and raise the bar for foreign workers.
Critics believe that the prevailing visa regime allows companies to bring in “cheap” labour from countries like India, which adversely impacts local employment opportunities. However, the Indian IT industry has rejected such claims arguing that Indian tech workers fill a skills gap which is as wide as two million in developed markets like the US. Domestic companies are also beginning to tweak their business models to reduce their dependence on visas by hiring more locals.