India's software industry is facing mounting challenges as countries from Australia to the United States have moved to tighten work visas to limit the influx of foreign workers.

Australia recently scrapped a visa programme called 457, under which skilled foreign workers were sponsored by local employers to work for four years, with Australian Prime Minister Malcolm Turnbull noting "this is all about Australia's interest".

Indians were among the top users of the visa, cornering a quarter of them, according to the Australian media.

Separately, the Trump administration has accused top Indian software firms like Tata Software, Infosys and Cognizant of misusing H-1B work visas by flooding the system with applications.

H-1B, used by Indian software companies to send their engineers on a short-term basis to complete projects for clients in the US, is issued through a lottery system.

Meanwhile, India and Singapore are in talks over easing restrictions for Indian software companies, under negotiations in the review of the Comprehensive Economic Cooperation Agreement.

"The sense of protectionism is becoming a global phenomenon," said Mr Sanchit Vir Gogia, CEO of advisory group Greyhound Knowledge Group.

A note by analysts at Nomura Research called "immigration tightening" from the US to the United Kingdom to Singapore "as negative for Indian IT" from a near-term growth perspective.

India's outsourcing industry, worth US$150 billion (S$208 billion), has grown over the last three decades as it provides services at lower costs, in part because of a steady supply of cheap labour.

Foreign firms outsource maintenance work to India and Indian software companies which, in turn, send their engineers for projects to countries across the globe.

Experts said Indian IT firms would have to increase the hiring of locals in countries they do business in, or look at local acquisition of companies and, in some cases, relocate.

The Indian government has said it is in talks on the matter with the US, Australia and Singapore, with the National Association of Software and Services Companies, which represents the Indian software industry, dismissing all the gloomy predictions. It said Indian companies had been preparing for the tightening of visa rules.

Some tech companies like Tech Mahindra said they were already looking at hiring locally. "We are trying to look at hiring locally and expanding centres. We have more than 15 centres (in the US) that we want to look at expanding," Mr Karthikeyan Natarajan, a senior executive at Tech Mahindra, told The Straits Times earlier.

Other Indian companies are already seeing an opportunity in the focus on retaining jobs for local talent. Mr Pravir Arora of Aptech, an education and training company, said it was looking to expand to countries like the US and Australia to offer training to the local population for software jobs.