Indian IT industry faces twin challenges of Trump, automation

MUMBAI: Automation and the new U.S. administration were the big unknowns at the Indian tech sector's annual shindig this week, with machines threatening to take away thousands of jobs and concerns over possible visa rule changes in the key American market.

But senior executives from the $150 billion industry, which rose to prominence at the turn of the century by helping Western firms solve the "Y2K" bug, said companies with skilled English-speaking staff and low costs could not be written off yet.

The sector, led by Tata Consultancy Services, Infosys Ltd and Wipro Ltd, is lobbying hard as the new U.S. administration under President Donald Trump considers putting in place visa restrictions.

The administration may also raise salaries paid to H1-B visa holders, a move that could significantly increase costs for IT companies that are already facing pressure on margins.

The longer-term challenge and opportunity for the sector was automation, executives said, as global corporations from plane-makers to consumer firms bet on the use of machines to further cut costs and boost efficiency.

That threatens lower-end software services and outsourcing jobs in a sector which employs more than 3.5 million people.

Summing up the mood at the three-day NASSCOM leadership event in Mumbai ending on Friday, Malcolm Frank, Chief Strategy Officer at Cognizant which has most of its operations in India, spoke of "fear and optimism."

Even top IT executives were "fearing the machines", he said.

Some Indian executives, including Infosys' Chief Operating Officer Pravin Rao, said that greater automation was expected to help engineers and developers shed repetitive jobs for more creative roles.

"Some part of the work we'll be automating 100 percent, you don't require people to do that kind of work," Rao told Reuters. "But there are always newer things, where we will be able to re-purpose employees who are released from those areas."