Wall Street Speeds Up India Expansion

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1:02Bloomberg Audio Studios. Podcasts. Radio. News. If you see the job openings, it's for a senior role, a software engineering role in Hyderabad. Vice president level, yeah. If you scroll below, there is something related to audits, there's technology. Earlier this week, I went job hunting on LinkedIn with Sadi Nayak, a Bloomberg finance reporter based in Mumbai. You can also experiment with other firms like, say, Goldman Sachs. Let's do Goldman Sachs. Goldman Sachs has an opening in Hyderabad for corporate planning and management vice president software engineering in Hyderabad. Now, I am not planning a career pivot or a move from New York to New Delhi.

1:49We did this so Sadiq could show me that jobs in India's finance sector are not what they used to be. Sadiq covers the big Wall Street banks, JPMorgan Chase, Morgan Stanley, Goldman Sachs. For years, much of the coverage of the global banking industry and its white-collar employees was focused on the U.S. and Europe. But Sadiq and I weren't looking for jobs in New York or Paris. We were looking in India, where there is a hiring frenzy. Wall Street banks don't have a big presence from the retail side. But if you look at the corporate side, as well as the investment banking side and the wealth side, basically, they have a huge presence.

2:28This is your JP Morgan, your Barclays, your HSBC, your Deutsche Bank. Sidi is on a team of Bloomberg reporters tracking Wall Street's growing reliance on Indian hubs. This is a shift that's accelerated as President Trump tightens visa requirements and as India's booming wealth management industry and private credit continue to grow. JP Morgan Chase is hiring credit specialists in Bangalore. Goldman Sachs is hiring analysts to review loans tied to everything from commercial property to yachts. So what began as low skilled call center jobs in India have now evolved into a mission critical hub of global finance and technology.

3:20This is the Big Take Asia from Bloomberg News. I'm David Gura, in for Wan Ha. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever-shifting region. Today on the show, Indian-based workers once supported American financial services firms. Now they're increasingly key to their operations. How India's government is encouraging Wall Street firms to expand their footprint in India. and how President Trump's new visa policies could speed up the push.

4:00India has been a tech hub for decades. In the late 90s and early 2000s, the country saw a call center boom, with multinational corporations like American Express, IBM, and Goldman Sachs setting up global capability centers, or GCCs, and staffing them with Indian workers. The goal was to provide 24-7 low-cost operational support for customers in the U.S. Here's Bloomberg City Nayak. These firms' operations in India were largely to address grievances of customers or initiate sales through phone calls. So, for example, if you're a client based in U.S. and had grievances related to insurance, the chances were that Indians at these call centers would answer these calls and help address these concerns.

4:45But that has changed dramatically over the last decade. Take Goldman Sachs as an example. In 2004, its office in the southern city of Bangalore had 300 employees, most of whom focused on tech and IT support. Today, that same office is home to more than 8 ,000 employees. Those workers do everything from core financial analysis to risk management, the kind of jobs that used to be done in U.S. cities. The perception that Indian GCCs are providing call center jobs is kind of changing. GCCs that are now offshore centers established by these multinational corporations or financial services firms now deliver high quality cost effective services and support their global operations.

5:29Call center jobs are now being outsourced to other emerging economies like Philippines. Property prices also are cheap because the value of rupee is depreciating vis-a-vis the dollar. So it sounds like there is quite a boom here. How far along are we? Financial services firms, banks have a significant employee base in India. The top six U.S. banks in India, that is J.P. Morgan, Bank of America, Goldman Sachs, Citi, etc., employ about 150 ,000 people in India. We know that Goldman Sachs and Morgan Stanley have more staff in India than anywhere outside the U.S. What we understand from sources is that one European bank concluded that a catastrophe in India, such as an earthquake, would disrupt its activities more than a similar disaster at its headquarters.

6:23Is this going to be a bigger magnet, do you think, in the years ahead? It is going to be a bigger magnet because most of these colleges as well as tech centers are churning out low cost talent on a large scale. There will be more opportunities for formal and informal workers. This is because there is no dearth of talent from the tech side in India. There's always a lot of graduates every year that get pulled up into these roles, which is why we can see the boom expecting to continue. And most of these firms trying to leverage on the talent that is built in India. According to estimates from the National Association of Software and Service Companies and consulting firm Zinov, employment at GCCs in India is projected to jump 50 percent to as many as 2.8 million people by 2030.

7:20Sidi says employees at these GCCs are breaking ground, too. A source told Bloomberg that BlackRock's Aladdin portfolio management platform was developed in India, as was Goldman's Atlas trading system. Then there's Zelle, the popular payment app. It was developed by Arizona-based Early Warning Services. But Siddhi's sources told her that India played a crucial role behind the scenes. We have information from our sources that the technology behind running this Zelle app was entirely built out of India through Bank of America, Goldman Sachs, GCCs in Bangalore and Hyderabad. This was kind of inspired by the fintech revolution in India.

8:03We have a UPI, Unified Payment Interface System in India, where there is a bank-to-bank transfer of payment systems using a QR code. So most of these inspirations were kind of instrumental in making or building the Zelle app. Could you situate this in kind of the broader Indian economy, how important it is that the growth of these GCCs, the importance of Wall Street's interest in putting some of these higher skilled jobs in India? So GCCs are a vital component of the Wall Street firm's global strategies as well as for India's economic growth. They are fostering job creation, skill development and foreign investment in India that is in turn getting fed into India's GDP growth.

8:50Their revenue is expected to surge to$105 billion from about$40.4 billion in FY19, according to NASCOM and Zinov estimates. So this is the kind of impact that we are talking about. Their growth in India is not just important for fueling economic growth, job creation, but also to get a lot of foreign inflow in terms of foreign direct investments in India.

9:21This year, U.S. immigration policy threw a wrench in India's workforce overseas, but it also became a boon for their domestic GCCs. How? That's after the break.

9:38This is Caroline Hyde. And I'm Ed Ludlow, inviting you to join us for Bloomberg Tech, a daily podcast focusing exclusively on technology, innovation, and the future of business. Every weekday, we bring you the top headlines from the world's biggest tech companies. From finance to defence, AI to entertainment, and from startups to the magnificent seven. We highlight the latest stories of the people and companies pushing the tech sector to new frontiers and the politics that shape global tech markets. We do this all every weekday, then bring you the most important conversations and analysis in our podcast.

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10:38In late September, President Trump announced a change to U.S. immigration policy with a big price tag, a$100 ,000 fee for an H-1B visa application. The country would rather not have to pay$100 ,000, but they'd rather, how do you do that? You hire Americans. So there's an incentive to hire Americans. The H-1B is a non-immigrant visa, which allows U.S. employers to temporarily hire foreign workers in highly skilled roles, engineering, technology, medicine. When Trump made the announcement, the U.S.'s financial sector found itself relatively unprepared, says Bloomberg's Sidi Nayak. So Indians make up roughly 70 percent of H-1B holders.

11:19When Trump first announced the$100 ,000 visa fee, it was seen as a big blow for Indians. We had J.P. Morgan CEO Jamie Dimon say that the announcement caught everybody off guard. Apart from that, we had HSBC stating that the new 100 ,000 H-1B dollar fee in the U.S. was manageable due to their relatively low number of foreign workers compared to other firms. JPMorgan, APAC CEO and head of banking Short Lienart, joined Bloomberg TV's Menika Doshi shortly after Trump's announcement and expanded on the company's disappointment that how this would impact India's younger workforce. So will JP Morgan be moving more jobs to your GCC here?

12:03Yeah, well, that's a very good question. And if it was, it would be a shame because it obviously has been a great source of opportunity for Indian students. You know, India produces 2.8 million STEM students every year and they've gone all over the world. In a statement to Bloomberg, a White House spokeswoman said changes to the H-1B visa program were necessary to put America first. She said the bank's efforts to move jobs overseas is, quote, evidence that they were using foreign workers to undercut Americans' wages. Though it is a change, it's not like the rug had gotten pulled out from under India's financial industry.

12:40Sadi says the Indian economy was expanding and the upper class was growing. India's in the middle of a wealth boom. The boom had already started post-COVID, and Trump's announcement of the visa fee kind of gotten in for these firms, like an incentive to hire more talent inward. Banks that might consider transferring a worker to the U.S. may now be open to hire them in India itself. An H-1B visa used to cost on average around$5 ,000. J.P. Morgan is among the top 10 companies in the U.S. that sponsors the most H-1B visas. Sadi says the new visa fee has sparked some chatter among the banks. Some of the Wall Street banks in India were looking to talk to their counterparts in the U.S.

13:29to talk to them about opening more roles in India, specialist roles in India, to kind of not be impacted by the higher H-1B dollar fee. Then there's the math involved in hiring people in India versus in a U.S. city.

14:10That's between$4 ,000 and$10 ,000 per employee. That compares with a$60 ,000 annual fee for an Indian on a U.S. visa and up to$120 ,000 for a U.S. citizen in the same role. Sadi says these calculations are driving banks to think differently about the way they balance staffing in their offices in the U.S. and in India. This has actually accelerated the pivot to India. Wall Street banks were hiring anyway. This fee is just a push, potentially bringing more jobs to India. So recruitment firms have told us that with the new fee, workers have started to question if a U.S. job is a priority for most of the employees as well as the employers.

14:55Firms have also realized that this is not going to be cost effective. And India, which was already seeing a GCC boom, would now benefit from this. Trump said the higher H-1B visa application fee is to address, quote, abuse of the program and to compel U.S. companies to hire Americans. But Siddhi's reporting shows it could backfire and hurt the U.S. instead. Senior executives from at least two U.S. banks in India are in talks to consider ways to ramp up their global capability centers in India. This is in response to the H-1B visa crackdown, according to sources. Some global lenders that had extended offer letters for positions in the U.S.

15:40are also looking to either revoke them or create alternative roles at these GCCs. That's bad news for the U.S. job market, potentially. But it could be great news for India. If these jobs are coming to India, it is a boon for the job market. A tech engineer or a tech specialist who has just graduated has more options on the table. He has the option of getting into a startup, a GCC of fintech firms. The role is being elevated in the sense that he has to do more jobs that involve research, legal, development, specializing, getting into certain spaces that only high-skilled talent can tap into. That is the kind of opportunity boom in GCCs has provided the tech talent.

16:34At the same time, if these firms are getting huge real estate spaces in India, they do require informal jobs as well. And that's kind of being a boon for the entire Indian job market. Sadi says the government has seen an opportunity and is working on a set of policies to incentivize the financial sector designed to help the GCC ecosystem thrive. India announces its federal budget on the 1st of February every year. This is kind of a broad layout that the government has on revenues, taxations, incentives, etc. From our sources, we have found out that there is a GCC policy framework that's going to be in the making so that more US firms or more foreign firms are encouraged and incentivized to build more GCC hubs here.

17:35These banks employ a huge workforce in India. Foreign firms bring in a lot of capital for the long term. These are strategic investments made for a 15 to 20 year horizon, which is why the government wants to incentivize these firms to build more operations in India, set up more offices, employ more workers and kind of steer the job market.

18:07Sadi says it'll be a while before we see how this pans out in India and in the U.S. as banks recalibrate their global hiring strategies. One thing banks are watching, and something that's holding them back from expanding too aggressively, is how Trump could retaliate. So U.S. firms are walking a fine line as they look to shift more of these roles to India. There is a risk that there could be a backlash from Trump, and Trump could now target GCCs next. It could bring GCCs in Trump's crosshairs. When we spoke to our sources, we found that these banks were considering Trump's imposition of tariffs or sanctions on GCCs as a major risk to their operations.

18:55They said that most of these banks and their US headquarters were talking to Trump about the issues and the fact that they were hiring a lot of people in India. So any impact of the government's orders would directly be felt on these banks' operations as well. But that is a story for another day.

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