President Trump’s new threat of imposing caps on H-1B visas given to Indians is closer to reality than you might otherwise think.
An exclusive report from Reuters revealed that the US has told India that there will be caps on number of H-1B visas given to its citizens.
As per reports, U.S. government plans to cap H-1B visas issued each year to Indians at between 10% and 15%.
The counter-tactic to comes in light of India forcing foreign companies to store their data of Indian customers within the country.
If the move goes through, it will further widen the differences between the two countries, which are already sparring over trade tariffs. India recently retaliated to US withdrawing preferential trade privilege by levying higher tariffs of its own on specific U.S. good.
From 70% Indian monopoly to 10-15% cap
The Reuters report that two senior Indian officials had said they “were briefed last week on a U.S. government plan to cap H-1B visas issued each year to Indians at between 10% and 15%”.
Currently there is no specific quota by country.
Indians dominate H-1B visa grants, taking up an estimated 70% of the 85,000 work visas the US grants every year.
Linked to Indian and global push towards data localization
The move is linked to India’s firm stance on data localization, which means it wants internet giants and multinational businesses to store the data of Indian users in India itself. This reportedly upset corporations like Mastercard and irked the U.S. government. American tech firms have lobbied hard against data localization rules.
As per the reporting, the news was confirmed by a Washington-based industry source aware of the subject, which told Reuters that India was not the only target of the move.
Who’ll be hit the worst?
If such a cap does come into existence, it will be disastrous for the $150 billion Indian IT sector which is at the forefront of profiting from the American work visa. Indian IT giants like Tata Consultancy Services (TCS) and Infosys leverage the H-1B visas to send engineers the United States which is its biggest client market.
These visas are also used by Silicon Valley’s tech giants to bring in talent from Asian countries like India. After the report, shares fell for Indian firms like Wipro (down 4%), and Infosys and TCS down more than 2%.
In response to the report, Indian industry lobby Nasscom opinedthat the US tactic will “imply a further crunch for businesses to access skilled workforce”, where US has deep links with India.
Free data or lose citizen dreams
With 70% of the 85,000 H-1B visas given by US annually, India is the largest beneficiary.
In 2018, the government mandated foreign firms to store their payments data in India for supervision. India is also bringing a set of data protection laws to enforce local processing and storage of data it considers sensitive.
The news that US plans to cap the working visa, comes a few days before U.S. Secretary of State Mike Pompeo is scheduled to visit capital New Delhi. Recently at a business forum, Pompeo had stated that the Trump government was pushing for unrestricted flow of data across borders, which will not only help U.S. companies but also ensure consumers’ privacy.