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. TCS has 142,000 workers worldwide, but 92 per cent of those workers are Indian, with the rest scattered around the world, according to company data.
Another way Indian firms can reduce their reliance on H-1B visas is to complete more of their U.S. customer work offshore. That's something U.S.-based IT providers have been trying to emulate. Eric Simonson, managing principal of research at the Everest Group, in Dallas, said between 75 per cent and 80 per cent of the workers at the Indian firms work offshore. In its most recent quarter, TCS cited improvements in its offshore ratio; Simonson believes it's because the vendor's customers are "more comfortable with how the model is developing and willing to push the the needle a little more."
There has been no action yet on the Grassley/Durbin legislation. Sen. Chuck Schumer, (D-N.Y.), hopes to introduce a comprehensive immigration reform bill by Labor Day that would bring a different approach to the H-1B visa issue. If there are restrictions on H-1B visas, NAFTA's provisions provide interesting possibilities for the Indian firms.
The NAFTA Professional TN visa is not capped; it's good for three years, and can be extended, according to Anastasia Tonello, a parter at Laura Devine Attorneys LLC in New York. Compared to the H-1B, it is also much easier to get, she said. Technology workers would likely seek TN visas as either computer systems analysts or as management consultants.
Jorge Pinto, professor of international business at Pace University in New York, said Mexico is coming into its own as a technology provider and more Mexican students are studying engineering in the U.S. Although the cost of living in Mexico is cheaper, Pinto doesn't see the main benefit of using Mexican workers as saving money. Instead, it's more a way of having an increasingly educated talent pool that is a short flight away from the U.S. "The advantage is not really cheap labor, it's a much more complicated matter," he said.
Lynn McNeal, a partner at outsourcing advisory firm TPI Inc. in Houston, doesn't believe that Mexico competes as well as lower-cost countries in Latin American, but its proximity to the U.S. already attracts significant investment. "The trend is well under way, regardless of the threat from Congress," he said.
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