Japan's easy green card norm may help Indian IT break into new geography

Japan currently accounts for 2% of the near $110 billion IT services export revenue of Indian firms

The Indian IT services industry expects Japan's proposal to relax residency norms for highly skilled professionals to set a trend of new geographies welcoming Indian talent, potentially offsetting some impact of business slowdown due to the protectionist stance taken by the US.

Japan currently accounts for two per cent of the near $110 billion IT services export revenue of Indian companies.

The new "Japanese Green Card for Highly Skilled Professionals", which is likely to be effective from April this year, comes as "positive vibe" for the Indian IT players at a time when the US has taken a protectionist stance for H1-B visas. Under the revised green card norms, the period of stay in Japan required by a foreign highly skilled professional to become eligible for residency would be reduced from five years to one year.

"For Indian IT services players, Japan continues to be a small market. With this kind of a proposal, we see a great potential for growth in the country. There are cultural barriers like language and a relaxed green card policy will help in overcoming some of those barriers," said R Chandrasekhar, president, National Association of Software and Services Companies (Nasscom).

Chandrasekhar believes that there will be a new set countries like Japan that might behave exactly opposite to the United States. US President Donald Trump's administration has recently proposed to double the minimum wage to $130,000 for H1-B visa-holders, thereby promoting companies to hire more locally. Employees of Indian IT firms use the largest chunk of H1-B visas in the US.

"Some countries like the US are implementing heightened barriers for talent movement. At the same time, we are going to see certain countries will do exactly the opposite. For example, Prime Minister Theresa May said we want to be a magnet for global talent. On one side they want to control immigration at the unskilled workers level, but they want to get more skilled talent. Canada has also welcomed skilled professionals," said the Nasscom chief.

Industry analysts say this proposal is to mitigate the acute demographic problem faced by the Asian nation. Japan's population is expected to shrink by up to 40 per cent by 2060 and the percentage of older people will be substantially higher.

Some experts, however, believe such a proposal will boost the sentiment of the industry more than having an impact on business.

"It will be more of a sentimental issue at a time when the biggest market is advocating protectionism. The size of the outsourcing business to Japan is still low as the country's economy is inclined towards native firms," said Dinesh Goel of technology research firm ISG.