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Wipro sees Trump's administration, regulations as threat to growth

Restrictions on visa issuance in the US will be a negative even if the company steps up local hiring

Wipro, Wipro logo
New Wipro logo. Photo: Twitter (@wipro)
Ayan Pramanik Bengaluru
Last Updated : Jun 09 2017 | 1:33 PM IST
Wipro, India’s third-largest software services exporter, said Donald Trump’s administration and his regulations could be a potential threat to its growth. 

At a time when IT companies such  as Tata Consultancy Services, Infosys, HCL Technologies and others seem to be jittery about the impact of protectionism in the US and other key markets; Wipro for the first time said “developments stemming from the recent US Presidential election could have a material adverse effect” on its growth.

The Bengaluru-headquartered company talked about this political uncertainty in its filing to the US Securities and Exchange Commission. 

“On November 8, 2016, Donald J Trump was elected the next President of the United States. As a candidate, Trump expressed support for policies impacting existing trade agreements, like North America Free Trade Agreement. He also proposed trade agreements, thus, promoting greater restrictions on free trade generally and significant increases tariffs on goods imported into the United States,” said the company in the filing. 

"Social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently operate could adversely affect our business," Wipro added. 

Trump administration's decisions - ranging from restrictions on immigration with stricter visa norms to repealing Affordable Care Act (or Obamacare)- are a cause of worry for the IT services major. Due to change of regulations, there are uncertainties in the business prospects from Wipro's healthcare.

“...The regulatory and legislative environment surrounding the healthcare industry is facing uncertainty due to the continuous lack of clarity surrounding the future of the ACA. Changes in existing regulations or increased governmental intervention in the industries, where our clients operate may adversely affect the growth of their respective businesses and therefore negatively impact our revenues,” said Wipro. 

The company also warned about a probable rise in the cost of doing business, if the proposed legislation to double the minimum wage for H1-B visa-holders becomes a law. Restrictions on visa issuance in the US will continue to hamper growth even if the company steps up local hiring. 

“There are some legislative proposals which, if passed and signed into law, could add further costs and/or restrictions to some of the high-skilled temporary worker categories. In turn, this will increase our cost of doing business in the US further and that may discourage customers from seeking our services. This could have a material and adverse effect on our business, revenues and operating results.” 
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