India’s information technology (IT) sector is upbeat about President Donald Trump’s return to the Oval Office. The mood is high despite concerns over potential changes to US immigration laws. Immigration experts and analysts have warned that Trump may go stricter on H-1B and other immigration laws during his second tenure as the US President.
Donald Trump’s previous term saw an increase in salaries for H1B workers as well as visa fee. In this term, the Trump administration may reconsider the annual allotment of H1B work visas, currently capped at 85,000. H1B applications could face tougher scrutiny, as denial rates under the previous Trump administration reached an all-time high of 24%. The duration and eligibility for Optional Practical Training (OPT) for international students may also come under review.
Despite these concerns, India’s IT companies celebrated the Republican victory as tech stocks led the rally on India’s benchmark stock indices. IT stocks appreciated sharply, fueling a rally in the benchmark indices after it became clear that Donald Trump will take over as the next US president for the second term. Shares of Tata Consultancy Services (TCS) surged 4.21 per cent, Infosys jumped 4.02 per cent, Tech Mahindra soared 3.85 per cent, and HCL Technologies climbed 3.71 per cent on the Bombay Stock Exchange (BSE). Also, Persistent Systems zoomed 5.86 per cent, LTIMindtree jumped 4.75 percent, and Wipro advanced 3.75 per cent.
So what is it that is pepping up the mood in favour of Indian IT companies?

Here are four likely factors

* Strong dollar: IT companies expect easier finance policies around interest rates, inflation etc., which may help loosen IT budgets of US companies. A stronger dollar benefits the Indian outsourcing industry, as a majority of the IT services companies cater to the US as a key business market. Thereby, the industry derives a large part of their revenue in US currency though their operational costs are in Indian rupees.
* Stability in policymaking: With Republicans controlling the government, Senate, and Congress, there is likely to be stability in policy making.
* Better tax policies for corporations: Donald Trump’s proposal to cut the corporate tax rate from 21% to 15% is likely to ease budgetary pressures and expand discretionary tech spending by US companies and thus benefiting Indian startups registered in the US as well as technology companies.
* Alternative to China: Donald Trump’s tough stance towards China means increased US fund flow to India. Trump is expected to play hardball with China, as seen during his last tenure. This will benefit Indian IT companies from a higher degree of fund flow. Advanced technologies like artificial intelligence (AI) and semiconductors may see more of US investments.
World’s richest man Elon Musk’s net worth also increased significantly after the Republican candidate and former US president Donald Trump won the elections. Musk has been a vocal supporter of Trump and his wealth surged due to a rise in his companies’ share prices following the election results.