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Good morning. In today’s edition —  US president-elect Trump’s H1B dilemma and India’s talent edge; a tribute to former prime minister Manmohan Singh’s transformative leadership; and fast-moving consumer goods (FMCG) firms racing to tap into rural India’s growing talent pool.

THE TAKE

Skilled Talent Or Tariff Wars, America's H1B Dilemma

Incoming US President-elect Donald Trump’s supporters and base are already split on the issue of H1B visas. 

There is, however, a nuance to this debate, which some might have missed. 

And that has to do with who is using up the H1B visas today and who is not. And equally, how India benefits either way.

Trump confidante Elon Musk is clear that he wants to use H1B visas to bring in talented people from outside the USA. 

This, evidently, does not sit well with some of the Make America Great Again (MAGA) base that elected Trump, who want most, if not all, foreigners kept out—talented or not. 

Musk himself is an import from South Africa and has consistently advocated for legal immigration and, by extension, H1B visas, which allow skilled workers into America. 

These workers often stay on to acquire green cards and eventually citizenship.

On the other hand, the election was fought and won on a key plank of illegal immigrants flooding into America. 

There is, of course, a distinction between illegal and legal immigrants, but it was not one that was made on the campaign trail, nor was it presumably expected to be. 

The reason Musk is making a strong case is that technology entrepreneurs like him know exactly what drives bottom-up innovation in their companies.

That work is being driven by people, including those on H1B visas, who work for companies like his, rather than IT services companies like Tata Consultancy Services (TCS).

This is a fine but important distinction, particularly when viewed from India.

Rajesh Nambiar, the National Association of Software and Service Companies (Nasscom) president, told me in an interview two weeks ago that Indian IT services majors have steadily reduced their consumption of H1B visas by 60% over the past eight years. 

This, of course, is due to a growing local presence and is perhaps more related to how different states and regions within America have stressed local hiring.

IT majors have also realised over the years the importance of culturally integrating into the local business and social landscape, rather than shipping everyone from India, even if they could.

This is not new.

What is new, as Nambiar tells me, is that H1B visa consumption by US corporations like Apple, Amazon, Google, Meta, Microsoft, and others is up 189% during this period.

So, seen once again through an Indian lens, while Indian engineers are still headed to the US, this is no longer the classic body shopping we have heard of. 

To reiterate, Indians migrating to the US under the H1B visa are increasingly working for US corporations and not Indian companies performing outsourced work for them. 

Musk’s defence of H1B visas must be seen in this context.

On the other hand, according to Nambiar, Indian IT companies have further reduced their onsite presence in recent years.

Covid, naturally, accelerated this trend, allowing companies to operate with fewer onsite employees and more offsite ones, based in cities like Bangalore, Hyderabad, Noida, and Mumbai.

Nambiar notes that what was once an 80:20 ratio, with 20% onshore, is now perhaps 90:10, with only 10% onshore. 

This is good news for India, as it translates to more local job creation.

America, of course, faces a major shortage of engineers and Science, Technology, Engineering, and Maths (STEM) graduates—a challenge Silicon Valley and the tech giants are acutely aware of and grappling with. 

India, on the other hand, has a surplus of engineers, though not all are immediately "go-to-market"  upon graduating often requiring upskilling before moving from the bench to live projects.

Trump has so far focused his economic threats around trade and the import of goods. 

He has threatened to impose heavy tariffs, ranging from 10% to 100%, on various countries, including India. 

As things stand, he is clearly unhappy with the terms of trade with India—for instance, we export significantly more to America than they do to us, for example in drugs, jewellery, and apparel. 

He has also repeatedly expressed displeasure over the high Indian import duties on certain products, such as Harley-Davidson bikes.

But on the import of people, thanks in part to repeated prodding by campaign backers like Musk, Trump appears favourably disposed. 

This, of course, aligns with what India has been negotiating for—greater access for its skilled workforce overseas, including in countries like the United Kingdom, in exchange for opening up its markets further.

It turns out India might have a better chance at the negotiating table with America than previously thought.

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OPINION

Manmohan Singh: The Architect of India's Global Rise And Digital Innovation

It is conventional wisdom to hail Manmohan Singh as the author of India’s economic reforms. This is misconceived. That credit goes to PV Narasimha Rao. Only a prime minister can strategise and execute a paradigm shift in the nation’s economic policy. He would need a number of technocrats to carry out that job intelligently, and Manmohan Singh, as Rao’s finance minister led a team of able technocrats, among whom we should note the likes of Montek Singh Ahluwalia, Shankar Acharya and C Rangarjan at the Reserve Bank of India (RBI), India’s central bank. To call Manmohan Singh the author of economic reforms is like saying that contract manufacturers Foxconn and Pegatron make the iPhone, and not Apple.

However, there are two signal achievements for which he deserves credit but does not often receive it. First, his pivotal role in elevating India as a geopolitical force, exemplified by the Indo-US nuclear deal, which ended decades of technological sanctions and integrated India into global dual-use technology regimes. Singh’s resolve in pushing the deal, despite opposition from the BJP and the Left, marked a rare exercise of his full authority.

Second, Singh catalysed India’s digital transformation. By backing Nandan Nilekani’s Aadhaar initiative, he laid the groundwork for digital innovations like UPI and India Stack, revolutionising financial inclusion and governance. These achievements highlight his legacy as a visionary leader who shaped India’s strategic and digital future.

CORE NUMBER

53,000

This is the total number of housing supply units launched in Delhi-NCR in 2024, with nearly 60% priced above Rs 2.5 crore, according to data from real estate consultancy firm Anarock. Despite a 44% rise in new supply over 2023 in Delhi-NCR, housing sales in the region fell 6% to 61,900 units from 65,625 last year, highlighting challenges in market absorption. Nationally, new launches across seven major cities, including Mumbai and Bengaluru, dropped 7% to 4,12,520 units, while housing sales declined 4% to 4,59,650 units in 2024. These contrasting trends raise concerns about the viability of ultra-luxury housing amidst a softening real estate market.

FROM THE PERIPHERY

—📈 Six of India’s top-10 most valued companies collectively gained Rs 86,847.88 crore in market valuation during last week’s trading. HDFC Bank and Reliance Industries led the gains, aligning with the BSE benchmark’s 657.48-point (0.84%) rise and the Nifty’s 225.9-point (0.95%) climb over the week. Among the gainers were Reliance Industries, HDFC Bank, ICICI Bank, Bharti Airtel, ITC, and Hindustan Unilever. In contrast, Tata Consultancy Services (TCS), Infosys, State Bank of India, and Life Insurance Corporation of India (LIC) saw declines in their valuations. These shifts reflect broader market dynamics as investor sentiment remained cautiously optimistic.

—📦 India’s trade exports to Australia surged 64.4% year-on-year in November to $643.7 million, driven by textiles, chemicals, and agricultural products, according to commerce ministry data. This growth comes despite a 5.21% drop in India’s overall merchandise exports to $5.56 billion during April-November 2024-25. The Economic Cooperation and Trade Agreement (ECTA), implemented in December 2022, has significantly expanded market access and employment opportunities. Exports to Australia grew 14% in 2023-24, alongside gains in IT, business services, and work-related visas. Both nations are now negotiating to upgrade ECTA into a Comprehensive Economic Cooperation Agreement (CECA), aiming for AUD 100 billion in trade by 2030.

—🏭 Rural demand outpaced urban consumption for the third consecutive quarter, with rural markets recording 6% volume growth compared to 2.8% in urban areas, according to NielsenIQ. In response, fast-moving consumer goods firms like Godrej, Dabur, and ITC have ramped up rural hiring by 10-15% this year, focusing on roles like van sales executives to expand distribution, Mint reported on Sunday. Godrej doubled its rural reach with affordable product packs, while ITC increased its rural stockist network by 1.3 times in two years. This hiring spree reflects a structural shift as rural buyers drive growth amid urban sluggishness, rising input costs, and inflationary pressures.

—❌ India’s push for critical minerals like lithium and cobalt, essential for green energy and semiconductors, remains a strategic challenge. The government on Sunday annulled the auction of 11 critical mineral blocks in the fourth round due to low participation. Four blocks, including tungsten and glauconite in Chhattisgarh and Arunachal Pradesh, received no bids, while seven others failed to meet the minimum requirement of three technically qualified bidders. This marks a continuation of tepid interest, with earlier auctions of 31 blocks across three rounds also cancelled. Of 48 blocks put up for e-auction, only 24 have been successfully sold to date.

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