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Trump May Suspend H-1B Visas: Trouble Time for Indian Techies?

Indian nationals account for over two-thirds of the H-1B visas issued annually and will be adversely affected by the move.


US President Donald Trump is considering suspending a number of employment visas including the H-1B, the most sought-after among Indian IT professionals, in view of the massive unemployment in America due to the coronavirus pandemic. Such a decision by the Trump administration is likely to have an adverse impact on thousands of Indian IT professionals. Already a large number of Indians on the H-1B visas have lost their jobs and are headed back home during the coronavirus pandemic.

Suspension of H1B, other visas

In addition to the H-1B visas, Trump is reportedly planning to suspend the H-2B visa for short-term seasonal workers, the J-1 visa for short-term workers including camp counselors and au pairs and the L-1 visa for internal company transfers. According to US official data, 2,75,000 H-1B visa applications were received for FY21 alone.

The proposed suspension could extend into the government’s new fiscal year beginning October 1, when many new visas are issued, according to a report by The Wall Street Journal.

“That could bar any new H-1B holder outside the country from coming to work until the suspension is lifted, though visa holders already in the country are unlikely to be affected,” the website reported.

Meanwhile, the US Chambers of Commerce CEO Thomas Donohue on Thursday wrote a letter to Trump, expressing concern over his reported move on temporary work visas. According to The Hill newspaper, Donohue said that American businesses need L-1 visa holders, who have a work visa valid for a relatively short amount of time, for necessary expertise.

He noted the importance of H-1B visa holders, who have a work visa valid for multiple years, for various industries, including technology, accounting and manufacturers, the newspaper said.

Setback for Indian Professionals

Technology and IT services companies primarily in India are often accused of replacing American workers by bringing in lower-paid employees from other countries. In the last four years, the Donald Trump administration has tightened rules for issue of H-1B visas, which has increased denial rates to as much as 30% for visa applicants, besides favoring US technology companies for the work permit.

Highly skilled workers on Non-Immigrant Visas (NIVs) such as H-1Bs and L-1s, are playing critical roles in the delivery of these services and the development of these products. Without their continued contributions, the economic pain would worsen, industry would slow, and the timeline for a treatment and cure could lengthen.

 “Given this, we seek exemption for technology workers as essential workers, from any restrictions that may be imposed in a second White House Proclamation. Priorities established by DHS’s CISA (Cybersecurity and Infrastructure Security Agency) that designates key categories of ICT workers as essential service, should help define the types of essential workers,” Nasscom official mentioned in a statement.

The demand for high-tech skills remains strong among employers in the U.S. labor market, even amidst the current COVID-19 crisis. Unemployment rate for computer occupations (those most common amongst H-1B visa holders) declined from 3% in Jan-2020 to 2.5% in May-2020, while unemployment rate for all other occupations grew from 4.1% in Jan-2020 to 13.5% in May-2020. Further, in the 30-day period ending 13th May 2020, there were over 625,000 active job vacancy postings advertised online for jobs in common computer occupations, including those most common to H-1B visa holders, as per Bureau of Labor Statistics’ Current Population Survey by National Foundation for American Policy.

Therefore, the data raises significant questions about using the argument of unemployment rate for computer professionals to justify the new restrictions on H-1B visa holders and international students working on Optional Practical Training (OPT), believes Nasscom officials.

US’ loss is Canada’s gain

While the US is losing out on Indian talent, its neighbor is making strides. According to an analysis of government data by the National Foundation for American Policy (NFAP) the share of Indian students in Canada more than doubled between the academic years 2016-17 and 2018-19 thanks to the more restrictive visa policy by the Donald Trump administration.

Canada is benefiting from a diversion of young Indian tech workers from US destinations, largely because of the challenges of obtaining and renewing H-1B visas and finding a reliable route to US permanent residence.

Moreover, Canada allows permanent residents to apply for citizenship after six years. Indian permanent residents admitted into the country jumped up over 117% between fiscal years 2016 and 2019, NFAP found.

A wait and watch approach

The White House, however, said that no final decision has been made and the administration is considering various proposals.

“The administration is currently evaluating a wide range of options, formulated by career experts, to protect American workers and job seekers especially disadvantaged and underserved citizens — but no decisions of any kind have been made,” White House spokesman Hogan Gidley said in a statement.

Nonetheless, the move to temporarily suspend the H1B visas will be unprecedented for the Indian IT/ ITes sector that heavily rely on these visas for many of their contracts within US. The industry needs to adopt a wait-and-watch policy to see the results of the 2020 US elections that is likely to have an impact on the visa policies. If at all such a law is passed, it will trigger a new wave of recruitment by Indian IT firms within the US in short term.

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Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at sohini.bagchi@trivone.com