Trump’s New Regulation On The H1-B Visa and How It Can Affect The Indian IT Sector
The new executive order drafted by Trumps Administration chokes the H-1B and L1 visas. It also ends the employment authorisation cards to the spouses on such work visas. Both of these visas are used extensively by the Indian companies. In 2015, President Barack Obama’s Administration had allowed the spouses of H1-B visa holders to get permission to work.
Previously, nearly 86 % of computer-related H1-B visas and 46.5 % engineering visas were given to Indians.
The draft of the new order was disclosed by some news websites.
Indian firms such as Infosys and TCS have been subject to lawsuits for alleged visa misuse and discriminatory practices. Some of the well-known American firms too were branded with the same allegation.
“I think with respect to H1Bs and other visa is part of a larger immigration reform effort that the President will continue to talk about through executive order and through working with Congress,” Sean Spicer, White House Press Secretary, told reporters at a daily news conference.
The US House of Representatives tabled a bill which aims to regulate the H1-B visa which is most popular among Indian techies.
The new proposal enquires about the minimum salary of those on H-1B visas to be doubled to $130,000 a year and makes it difficult for tech giants to hire foreign workers.
The move is to make US tech companies hire more American professionals, which would adversely affect Indians.
Technology companies have long used the visas to bring skilled foreign talent to America thus allowing Indian students and professionals to migrate to the US.
Since 1990, more than 500,000 with H1-B have migrated to US. Over 60% of Indian IT revenues comes from the US. Five top Indian IT companies lost Rs.33, 000 crore in market cap in a single day on Tuesday following uncertainty about the new environment in the US.
The impact of the new proposals on India
The beneficiaries of H-1B visas are Indians, followed by the Chinese. In 2014, 70% of total H-1B requisitions approved were of Indians.
Over 60% of Indian IT revenue comes from the US. The top five Indian IT companies lost Rs.33, 000 crore in the market cap on Tuesday following the news about the new regulation.
The bill also bars the companies, having over 50 employees and 50% of them on H-1B or L1 visas, from hiring more manpower.
A majority of Indian IT professionals who work in US, generally have a Master’s degree, which gives them an edge over applicants from other countries. The new bill will eradicate the Master’s degree exemption for H-1B applicants, which allows them to skip additional paperwork if they have an equivalent of a Master’s or higher degree.
According to a Computerworld analysis data obtained through a Freedom of Information Act request, 86% of the H-1B visas are issued for workers in the computer field.
Indian firms like Infosys, Wipro, Tata Consultancy Services, etc., bear the brunt of this new regulation. In reaction to the news, stock rates of the information technology companies fell by 9%.