H-1B Visa: Will US Prez Donald Trump's new executive order impact Indian IT cos?

Highlights:

1. Trump in an executive order to be signed on Tuesday will direct federal agencies to recommend changes to a temporary visa programme

2. The order will ask four departments to propose reforms to ensure H-1B visas are awarded to the most skilled or highest paid applicant

 
With an aim to provide employment opportunities to American nationals and to curb misuse of H-1B visas, the US president Donald Trump will sign an executive order later on Tuesday which is likely to have impact on IT companies in India. 

According to Reuters report, Trump will directing federal agencies to recommend changes to a temporary visa programme used to bring foreign workers to the United States (US) to fill high-skilled jobs.

The H-1B visas are most sought after work visas by the Indian IT professionals which permits them to work in the US.

The order Trump will sign on Tuesday will call for "the strict enforcement of all laws governing entry into the US of labour from abroad for the stated purpose of creating higher wages and higher employment rates for workers in the US," the Reuters report said quoting one of the senior officials,  as saying.

It will call on the departments of Labour, Justice, Homeland Security and State to take action to crack down on what the official called "fraud and abuse" in the US immigration system to protect American workers, cited the news report.

The order will call on those four federal departments to propose reforms to ensure H-1B visas are awarded to the most skilled or highest paid applicant.

India's IT software industry representative Nasscom believes that the new order will direct the federal bureaucracy to study more ways to reform and restrict the H-1B system.

"The new executive order calls for more studies and deliberations; and most of the legislative proposals have been offered before and not acted upon. However, the executive order is another harbinger of more  aggressive oversight and enforcement of the H-1B program," Nasscom said in a press release on Tuesday. 

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As per the Reuters report, H-1B visas are intended for foreign nationals in "speciality" occupations that generally require higher education, which according to US Citizenship and Immigration Services (USCIS) includes, but is not limited to, scientists, engineers or computer programmers.

The government uses a lottery to award 65,000 visas every year and randomly distributes another 20,000 to graduate student workers.

India's homegrown IT company like Tata Consultancy Services (TCS) is not concerned about such changes in the US H-1B visa norms and has demanded for more engagement from the US government with India.

TCS chief executive officer (CEO) Rajesh Gopinathan in an interivew to PTI on Tuesday said the current discourse on the issue in the US is driven by emotions rather than economy and the best way to tackle it is through greater engagement.

"The best way to tackle that is greater engagement. Because the way, sometimes, companies like us get characterised is very different from the reality of what we bring to the table," Gopinathan, who is in his mid-40s, told PTI.

Last month, Tata Consultancy Services (TCS) had said that it had operated in a self-imposed visa-constrained environment this year and had applied to get only about 15% of the visas for which it normally applies, according to The Economic Times report dated March 20. 

"All said and done, the US has been a very welcoming market for us. So you keep aside the immediate issues, it's been a market that has been fair, it has been an open,  competitive environment," Gopinathan told PTI, exuding confidence that TCS would be able to successfully compete in any environment.

ALSO READ: TCS unperturbed by possible changes to H1-B visa regime: CEO

In March this year, another domestic IT firm Infosys had decided not apply for H-1B visas for its junior-level employees due to tougher regulations governing the work visas, The Economic Times reported.  

"The company is not applying for visas for employees with under four years of experience. We are talking to clients about offshoring more work to India, and the work done by  junior employees can be brought to India,” the report said citing one executive at the company, as saying.

In the beginning of 2017, the US Congressmen had proposed a bill raising the minimum wage on the H-1B visa to over $130,000, more than double of what is mandated at present.

The company is planning to hire more employees to its onshore clients' side.

“There are job requirements in the US, but some customers have started asking that fewer H-1B employees be deployed onsite on their projects. We are trying to hire more onshore to deal with this issue,” a third Infosys executive had told the newspaper. 

The new executive order on immigration norms is likely to impact the businesses in the US and their efforts to remain competitive on par with other countries.  

"Any onerous additional restrictions on the H-1B and L-1 visa systems would hurt thousands of US businesses and their efforts  to be more competitive by hindering access to needed talent," Nasscom said in a statement. 

ALSO READ: Tougher US regulations make Infosys not to apply for H-1B visas for junior-level employees; stock down nearly 2% in early trade