Indian IT firm Wipro, in its annual filing with the Securities and Exchange Commission (SEC), has specified US President Donald Trump’s protectionist and anti-immigration policies as a risk factor that could potentially impact its business.
This is the first time an IT company has designated a US President as a potential threat.
To be more specific, this is the first time an Indian IT company has explicitly labelled Trump’s “America First” approach as a threat.
A company’s risk factors are a comprehensive listing of everything that could hinder its revenue, operations and profit, including geopolitical instability and terrorists attack.
The Bengaluru-based firm in the document, which was filed on June 2, said that significant developments stemming from the recent US presidential election could have a material adverse effect on its business. In a section detailing potential business threats, the IT firm noted:
On November 8, 2016, Mr Donald J. Trump was elected the next president of the United States. As a candidate, President Trump and his administration expressed support for policies impacting existing trade agreements, like North America Free Trade Agreement (“NAFTA”), and proposed trade agreements, and promoting greater restrictions on free trade generally and significant increases in tariffs on goods imported into the United States. Changes in US 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.
Although the US is a key market for the India’s third-largest IT services firm, stricter immigration laws could make it difficult to get work visas for its employees, the company noted. Top Indian IT firms get over 60% of their revenue from the US. Wipro makes over 50% from the Americas, including the US.
For the past few months, Trump’s anti-immigrant policy has raised concerns over the availability of the H-1B work visa. The company said that while it had a significant number of employees with valid work visas in the US, it will now increase local hiring in the country.
This declaration comes after India’s second-largest IT services firm, Infosys announced that it would hire 10,000 Americans over the next two years.
With other key markets such as the UK, Singapore, and Australia also tightening immigration laws, implementing higher salary thresholds and tougher rules for employment permits, Wipro said it could expect even more costs ahead.
Information source: The Quartz
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