H-1B visa move signals trade talks widening to services, says JPMorgan’s James Sullivan

JPMorgan’s Asia-Pacific research head James Sullivan said the H-1B visa issue signals a shift in US-India trade talks. He said it could expand beyond goods into services and mark the first major impact on the services sector. He was speaking at the bank’s 10th Annual India Conference.Sullivan warned that IT services face challenges from higher costs and uncertainty. Companies are cautious on staff travel and student visa programmes are under review. The proposed $100,000 cost per employee could be significant compared with average US IT salaries. He said, “Implementation will absolutely be critical.”

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Artificial intelligence (AI), Sullivan believes is a valuable tool for research, but not a substitute for people. “LLMs are fantastic at summarising what the world knows… my team’s job is to ask new questions,” he explained. He does not expect AI to lead to sharp cuts in headcount or salaries but sees it improving research depth.Sullivan pointed out that Indian equity market has seen $23 billion in foreign investor net selling over the past year, driving underperformance. However, this came after a period of strong gains and may now create room for another cycle of outperformance. Asia, India and China rarely outperform at the same time, and recent strength in China has drawn some capital away from India.

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JPMorgan has raised its full-year economic growth forecast after India’s second quarter gross domestic product (GDP) came in at 7.8%. A strong monsoon, goods and services tax (GST) reforms and normalising earnings expectations could support rural consumption and market gains. Risks remain around inflation, especially if India is forced to reduce Russian oil purchases.

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