Tech firms should expand presence in India

Utkarsh Rai | Updated on: Sep 02, 2020

Setting up a second headquarters here will enable companies to overcome visa hurdles and help India become self-reliant

For the last two decades, the H-1B visa has always been in the news — whether it was the capping of the number of visas or fair pay to the H-1B-visa holders, and now comes the suspension of new visas altogether. Every such move by the US government triggers more work transferred from the company’s headquarters in the US to its centres in India. In the last two decades, these centres have become big and important as they are doing more and more complex work and are generating intellectual properties. They have expanded their footprints to various functions of the organisation. No wonder many of these centres house a significant percentage of global workforce.

Tech companies in the US don’t want their government to interfere with H-1B visas. They want to grow existing teams and seed new teams in their headquarters. With local talents being in short supply, H-1B-visa holders are the hope. Earlier, with H-1B restrictions, the L-1 visa was used to transfer Indian employees to their parent company. In the last few years, the US government has tightened L-1 visa too. Apart from the talent shortage, the rising cost in the US and a weakened rupee continue to make India attractive. A fresher in the US is around four-five times more expensive than a comparable one in India, though the gap shrinks with increased work experience.

With the continued tightening of H-1B and L-1 visas, it is time to think of making India as the second headquarters for tech companies.

First, let’s look into these four challenges which are often cited, in the light of current reality:

Location of decision-makers: Most executives must be housed at the headquarters. This is for faster decision-making as free-flowing and closed-room discussions are fruitful when executives are co-located. But Covid-19 has broken this myth. Now every executive is working remotely, but the decisions are still being taken. The belief that executives in the board room or hovering around the coffee machine bond better and deliver better results is now passé.

Proximity to the customer: As a bulk of thet ech companies’ sales is in North America, a quick customer visit is possible to maintain relationships if the executives are based in the US. This argument is broken by two events: First, Covid-19 has shifted evrything online; and second, the revenue from outside North America has started to show an upward trend. An executive based out of India will be able well-equipped to reach out to clients in this side of the world.

Managing time zones: Often, some executives are not based at the headquarters but are spread across various time zones in the US. They are considered to be in a ‘manageable’ time zone which helps in impromptu voice calls. There is no denial that the time zone still plays a big role, and international executives understand and bear this pain well. However, the requirement to be in a preferable time zone has reduced significantly in the last decade as text, email and other non-voice based traffic has overtaken the voice traffic.

Tech restrictions: The US has categorised the world into three buckets based on the sensitive nature of technologies which can be shared or transferred. NATO alliances and a few other countries are in the first category. India falls in the second category with a few technologies under restriction. Countries like China and Russia are in the third category, which has higher restrictions. These minor restrictions have not impeded the growth of Indian centres and will not be so for second headquarters as well.

Any big metropolitan city in India having a good talent pool could be home to a second headquarters, in one goes by the requirements posted by Amazon for its second headquarters. But in reality, the ‘second headquarters’ tag is basically a branding strategy to hep the tech company build a better relationship with the local government to get some incentives and boost its presence. US tech firm CEOs have been coming to India for years and offering help in the ‘Digital India’ and ‘Make in India’ efforts. India is moving towards atmanirbharta and going ‘vocal for local’, so a company having a second headquarters here would be better positioned to sell.

“If any product will work in Indian conditions, then it can work anywhere”, is a popular saying in the tech world. Soon, there might be a system where products are tried and tested in India, and then be exported to the other countries in this side of the world.

The writer is a leadership coach and the former India and China head of an IT MNC

Published on September 02, 2020
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