H-1B visa cap likely to hurt US firms too, here's how

The H-1B visa is a non-immigrant visa, which allows US companies to employ foreign workers in specialty occupations requiring theoretical or technical expertise.
Image for representational purpose only.
Image for representational purpose only.

Even as the US and the Indian government appear edgy over the controversial H-1B visas, for Indian IT, it’s business as usual. At least for now, Executives believe, until a formal order is put in place, there’s no reason to panic over the prospects. They are right, as Indian companies have seen repeated and periodic threatens from the US administration over work permits, yet Indian companies survived the anticipated onslaught over the past two decades.

“Every time around US elections, or when growth slows down or when US unemployment hits a peak, we have been hearing that restrictions will soon follow. But they (US administration) is well aware that any such move will affect them more than us,” a senior IT industry official told Express.

The H-1B visa is a non-immigrant visa, which allows US companies to employ foreign workers in specialty occupations requiring theoretical or technical expertise. The issue over visas started during former US President Bill Clinton’s regime as companies started hiring Indians for onsite jobs besides outsourcing call center operations to Indian BPOs. “Though there’s much noise about US citizens losing out jobs to Indians, in contrast, the number of visas being allotted every year kept rising,” the official reasoned.

Interestingly, even within the US opinion is sharply divided on allotting work permits to skilled workers from anywhere across the globe. This is evident from none other than Google’s former CEO Eric Schmidt, who famously the annual limit of 85,000 H-1B visas as ‘the single stupidest policy in the entire American political system.’

That said, some believe there’s reason enough to pay attention to the Donald Trump administration’s discomfort over work permits to skilled foreign workers. Perhaps for the first time in nearly a decade, there was a sharp 10 per cent drop in H-1B visa approvals in 2018 over the previous year. Industry experts attribute this to the aggressive policy being pursued by the US government to clamp down on work permits influenced by the ‘Buy American Hire American’ 2017 executive order, which calls for a broad review of US worker visa programs including the H1-B program.

Of the 85,000 annual H-1B visas, over 70 per cent are pocketed by Indians. And the latest reports about the US government considering capping the annual limit to 10-15 per cent to Indians — the Trump administration denied it subsequently — is likely to weaken US companies than it is to affect our domestic industry. “If US policy make it more difficult to hire advanced tech workers, it will only weaken the US companies that depend on them to help fill their skills gaps, put jobs at risk, creating pressure to send technology services abroad,” said trade body Nasscom.

All eyes are now on the US Secretary of State Mike Pompeo’s scheduled visit to Delhi next week for trade talks. The high-profile visit comes in the wake of India raising tariffs on 28 products including almonds and apples and amid tightened norms on e-commerce industry besides stringent data storage restrictions on digital payments. The latter affects tech behemoths including Google, Facebook, and Mastercard  — and e-commerce and retail companies like Amazon and Walmart.

The $150-billion Indian IT sector gets a lion’s share of its revenue from the North American market. Though Indian companies started de-risking geographic footprint ramping up presence in European and other markets in the aftermath of the 2008 US financial crisis, which slowed down IT outsourcing business, North America continues to account for a significant amount of revenue generation for Indian IT services firms.

Lastly, according to Nasscom, the number of unfilled jobs stood at 7.5 million in the US as on April. Of this, 67 per cent need specified technical skills. “It is this very unmet technical requirement that skilled immigrants, including workers on H-1B visas, have helped meet in the US. The US’ global leadership in technology has been made possible, in part, by its ability to attract the most talented workers from around the world,” the Indian IT industry body said.

US opinion divided on H-1B visa cap

Even within the US, opinion is sharply divided on allotting work permits to skilled workers from overseas. For instance, none other than Google’s former CEO Eric Schmidt, who  famously called the annual limit of 85,000 H-1B visas as ”the single stupidest policy in the entire American political system”.

But, some believe there’s reason enough to pay attention to the Trump administration’s discomfort over work permits to skilled foreign workers. Perhaps for the first time in nearly a decade, there was a sharp 10 per cent drop in H-1B visa approvals in 2018

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