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Indian IT salary in US higher than average pay

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The Economic Times
14th February, 2020 15:46 IST

MUMBAI: Some in the United States project Indian IT as sweatshops exporting armies of low-wage tech workers. That has influenced the country’s immigration policy, especially under Donald Trump.

So when the US president comes visiting later this month, IT industry body Nasscom intends to disprove that. And one data point seems to be particularly powerful. Indian IT firms are estimated to have paid an average compensation of $96,300 to its US employees in 2018, higher than the average wage of $94,800 that IT professionals get in the US. This is data from US research firm IHS Markit Research.

The Indian IT story is also compelling from the US job-creation standpoint. In 2018, Indian IT employed nearly 1.8 lakh people in America and supported an additional 3.4 lakh jobs across the US economy. So a total of over 5 lakh direct and indirect jobs.

IHS Markit Research said job creation in the US by Indian IT companies grew at an average annual rate of 3.8% from 2016 to 2018, faster than the 2.6% average annual employment growth of the industry of which it is a part of.

Nasscom says there are also major misconceptions around visas. “Traditionally, the feeling is that Indians have taken a lion’s share of visas. But if you look deeper, you will see the bulk of the visas go to MNCs operating from India. The India-based tech firms have not been getting (many) visas. At the (US) administrative level, someone is assuming that what the MNCs are doing need to be supported, but not the Indian tech companies. All we are saying is, create a level playing field,” Nasscom chairman Keshav Murugesh, who is also the group CEO of WNS Global Services, said.

The top seven India-based companies are said to have received only 2,200 new H-1B petitions for initial employment in FY2018, less than 2.6% of the 85,000 annual limit for companies. The US is estimated to have a shortage of 7.5 million STEM talent as of April last year. Many in the US tech industry feel immigration is the only way to deal with it.

Indian IT, Murugesh said, has shown resilience, fantastic maturity and greater confidence in how it invests ahead of the curve in what it thinks continues to be demand enhancers for the long-term growth of the industry. “That augurs extremely well for India. The focus on skilling is not with the intention of being defensive but wanting to be aggressive and batting on the front foot. India can emerge as the data refinery of the world. It’s a synergistic relationship that can be carved out between the two countries from a tech standpoint,” he said.

IHS Markit Research’s data showed Indian IT companies added $57.2 billion directly to the US GDP in 2017, a figure higher than the GDP of six US states. In 2017, they paid $16.3 billion in wages to US employees, much of which went back into their local communities. And for every $1 million invested by these companies in America through the purchase of equipment, technology, and facilities, $1.2 million was added to the US GDP, the research showed.

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