As Indian firms fight the threat of H-1B restrictions, IT services companies might not leave their fate to politics. In an effort to reduce their need for visas, they may look to increase their presence south of the border.
Indian IT firms have boosted operations in Mexico in recent years to serve Latin American and U.S. customers. One advantage to doing so involves the North American Free Trade Agreement (NAFTA), which enables Mexican and Canadian professionals to work in the U.S. without an H-1B visa.
In other words, Indian firms could send employees to Mexico, and then move some of their Mexican workers to the U.S. under the auspices of the treaty. The Mexican workers would not need an H-1B visa to work in the U.S., though they would need what’s called a TN visa. That visa is available to Mexican and Canadian nationals who qualify under a number of professional categories and meet specific education and experience requirements.
Many of the major Indian firms have operations in Mexico. MexicoIT, an industry group in Mexico City, said there are 500,000 IT professionals in the country, with another 65,000 graduating each year from colleges with degrees in IT-related skills. While costs are higher in Mexico than in India, Alfredo Pacheco, CEO of MexicoIT, said the difference is only about 10% to 12%.
Put in perspective, Mexico today is little more than a niche location for the large Indian firms. For instance, Mumbai-based Tata Consultancy Services (TCS) announced last month its third delivery center in Mexico with plans for 500 workers.