HOW THE NEW

H-1B VISA
REGIME WILL
IMPACT
INDIANS
BACKGROUND
 The H-1B visa program was launched in 1990, when President
George H.W. Bush signed the "Immigration Act of 1990." It is
intended to help American firms deal with labor shortages in
rapidly growing fields that demand specialized skills, such as
research, engineering and computer programming. Each
application or "petition" is submitted by a sponsoring company
that foots the bill on behalf of a candidate it seeks to employ.
The program has an annual cap of 65,000, and an additional
20,000 visas are granted to employees with master's degrees
from American universities. If the number of applications
exceeds the cap, the government conducts a "lottery" to decide
who gets to stay. Every year 6,800 visas are reserved for
workers from Chile and Singapore in accordance with free trade
agreements those countries have signed with the U.S.
Trump's views on illegal immigration have been widely circulated
and commented upon, and the Muslim ban led to protests. But it's
his position on highly skilled foreigners working in the U.S. that has
companies and their investors concerned . The Trump
administration has been gradually updating policies to align them
with the presidential executive order on buy American and hire
American. Slow but steady progress has been made over the years,
but the government has a delicate balancing act to perform so as to
not adversely affect industries that rely on these visas. Citing the
COVID-19 pandemic and unemployment in the U.S., the president
signed an executive order on June 22, 2020 to freeze the
distribution of green cards and temporary worker visas, namely the
H-1B, H-2B, J and L, through the end of the year. This also includes
dependents."Under the extraordinary circumstances of the
economic contraction resulting from the COVID-19 outbreak,
certain nonimmigrant visa programs authorizing such employment
pose an unusual threat to the employment of American workers,"
said the order. Employees with approved visas for fiscal year 2021
starting in October will be affected by the rule, according to
immigration lawyers. It's unclear at the moment what will happen
to renewal applications for those in the U.S. currently.
RELEVENCE
 Since the ban is effective immediately, the
processing of all new H-1B, H-2B, J, and L visa
categories stand suspended. This means those who
do not have a valid non-immigrant visa as of June
23, and are outside of the US, will not be allowed to
enter the country until December 31. Workers in
essential services in the food sector have been given
some reprieve, and their entry shall be decided by
the consular officer of immigration services.H-1B,
H-2B, J and L visa holders, and their spouse or
children already present in the US shall not be
impacted by the new worker visa ban.
ANALYSIS
 Indian IT companies are amongst the biggest beneficiaries of
the US H-1B visa regime, and have since 1990s cornered a
lion’s share of the total number of visas issued each year .
As of April 1, 2020, the US Citizenship and Immigration
Services (USCIS) had received about 2.5 lakh H-1B work visa
applications, according to official data. Indians had applied
for as many as 1.84 lakh or 67 per cent of the total H-1B
work visas for the current financial year ending March
2021.Apart from the suspension of these work visas, the
executive order signed by Trump has also made sweeping
changes to the H-1B work visa norms, which will no longer
be decided by the currently prevalent lottery system. The
new norms will now favour highly-skilled workers who are
paid the highest wages by their respective companies.
CONCLUSION
 This could result in a significant impact on margins
and worker wages of Indian IT companies which
send thousands of low-cost employees to work on
client sites in the US. Though the large Indian IT
companies have cut down their dependency on H-1B
and other worker visas by hiring as much as 50 per
cent of staff locally, they still rely on these visas to
keep costs in check . Indian IT companies also offer
subcontracts to Indian nationals already present in
the US with valid H-1B visas. Bangalore-based Wipro
spends as much as 20 per cent of its revenue to
subcontract Indian workers with valid H-1B visas.