The Donald Trump administration's latest blow on H-1B and L-1 visas popular among Indian IT professionals will not only restrict employment chances to the United States for first-time goers but also make it difficult to get an extension after the expiry of the visas. This was easy until now with H-1B visas being automatically extended after a 3-period.
Trump campaigned on an "America First" platform of favoring Americans for hiring and has remained true to it which has made Indian software firms change their hiring strategy and policies.
Impacts Indians working in US
The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialised fields. Under the H-1B visa programme, US-based companies hire highly skilled foreign workers, up to a maximum of 85,000 a year. Of these 65,000 are hired from abroad and 20,000 from foreign nationals studying in the US.
With this new US directive, it won’t be. Instead, the applicant will have to apply for reissuance which will mean the application will be taken along with the fresh applicants of H-1B, and go through the entire process again. Since the H-1B is a lottery system manner of issuing visas, the chances of someone already in the US being considered will become remote, said Kris Lakshmikanth, Chairman and Managing Director at The Head Hunters India; and visiting faculty, Institute of Management, Ranchi.
This will impact Indian software companies that have a large number of Indian professionals working in the US.
In April, the White House had said, “You may know their names well, but like the top recipients of the H-1B visa are companies like Tata (TCS), Infosys, Cognizant—they will apply for a very large number of visas, more than they get, by putting extra tickets in the lottery raffle, if you will, and then they’ll get the lion’s share of visas,” the senior official said, according to transcript of the briefing posted on the White House website. However, TCS and others have cut down their employee strength by 50 percent, says Lakshmikanth.
An L-1 visa is an intercompany visa which is usually renewed every year and is not part of the lottery system like H-1B. But even this will be scrutinised now by the Trump administration.
Trump administration's stringent policies
With an aim to provide more jobs to the locals, in keeping with Trump's poll promise, the government there is coming out with all kinds of restrictions that will curtail bringing foreign employees to US shores. On 31 March, 2017 the US Department of Homeland Security announced steps to prevent the fraudulent use of H-1B visas, used by employers to bring in specialised foreign workers temporarily under its Buy American, Hire American policy.
The Indian IT sector gets over 80 percent of its revenues from the US and Europe while the remaining comes from Asia and the domestic market. With the US mulling over various measures to make visa norms stricter under the administration, Indian IT firms have already started tweaking their business models to accommodate more locals.
Mohandas Pai, Chairman, Manipal Global Education Services and Aarin Capital - National Stock Exchange of India feels that none of these directives or change in visa rules will impact 'good and sound' software firms from India. "An Infosys or TCS or Wipro send only highly skilled professionals abroad who work in highly skilled projects. The change in visa rules will only make Indians more competent. It will result in more work going offshore. If there is any worry over the change in visa rules, it will be only for body shops, " said Pai.
The message coming from the Trump administration is indeed alarming for the Indian software industry, says Harish HV, Partner, India Leadership team, Grant Thornton India. “It will have an impact. But there is nothing certain about the administration. The industry must be prepared for significant uncertainty and continuous change,” he said.
Indian US citizens will be happy
Indians who have taken US citizenship after going to work there on H-1B visas will be the happiest with the Trump administration, says Lakshmikanth. "After working for a few years with the Indian software firms and getting US citizenship, they have preferred to work as contract labour as it fetches them $150-$200 per hour. They will be happy with the Hire American policy of Trump," he said.
Updated Date: Oct 26, 2017 23:25 PM