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H-1B Visas Temporarily Suspended

H-1B Visas Temporarily Suspended

Context:

U.S.A President suspended the entry into the United States of certain foreign workers, a move which is being considering as would help the coronavirus-battered economy, but which business groups strongly oppose.

Background

  • US President issued a presidential proclamation to temporarily block the foreign workers entering on H-1B visas for skilled employees, and L visas, for managers and specialized workers being transferred within a company.
  • Entry on H-2B seasonal worker visas, used by landscapers and other industries is also being blocked.

Summary of the Debate

Temporarily Suspension of H-1B and other Visas

  • Since the ban is effective immediately, the processing of all new H-1B, H-2B, J, and L visa categories got suspended. This means people 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.
    • Some reprieve has been given to workers in essential services in the food sector, 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 will not be impacted by the new worker visa ban.
  • Those who are already in the United States, as well as valid visa holders overseas, have been exempted by the proclamation but they must have an official travel document that permits entry into the United States.
  • Food supply chain workers and people whose entry is deemed in the national interest are also exempted.

The stance of Tech Individuals and Corporates

  • AS per Businesses including major tech companies and the U.S. Chamber of Commerce, the visa suspension would stifle the economic recovery after the damage done by the pandemic.
  • Sundar Pichai, CEO of Google, expressed disappointment over the proclamation. According to him, immigration has contributed immensely to America's economic success, making it a global leader in tech, and also Google, the company it is today.
  • As per, U. S. Chamber of Commerce the visa suspension is going to stifle the economic recovery after the damage done by the Covid-19.

Impact on India

  • Importance of Indian Tech Industry
    • The Tech industry is a very important constituent of the economy as far as India is concerned.
    • Out of the 191 billion dollar industry, we have nearly about 141 billion is exported and U.S.A is 62 percent of that (by far the largest).
    • The Tech industry also contributes nearly 8 percent to the GDP and nullifies 50 percent of the Merchandise trade deficit in terms of contribution of Industry.
    • Nearly 4.3 million people are employed and worked in 80 countries.
  • Indian IT Industry
    • US move to stop issuing of H-1B visa and other work visas for the rest of the year is going to hurt the Indian IT industry's margins.
    • The proclamation is expected to impact Indian IT professionals and several American and Indian companies who were issued H-1B visas for the fiscal year 2021.
    • Indian IT companies were one of the biggest beneficiaries of the US H-1B visa regime, and have a large share of the total number of visas issued each year.
  • Apart from the suspension of these work visas, there are changes to the H-1B work visa norms, which will no longer be decided by the currently prevalent lottery system.
  • This will 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.

Impact on U.S.A

  • Indian tech workers are highly skilled and are highly demanded in all over the world. So, their loss will damage the US economy too.
    • This is going to have a negative impact on the US economic recovery.
  • The measure have been taken because of the slow down brought by the Covid-19 pandemic and high degree of unemployment in US but the reality is the Tech sector is a different sector.
    • The Tech sector in the USA has low degree of unemployment.
    • As per US unemployment figures, the overall unemployment grows from 4 percent in January 2020 to 13.5 percent in May 2020, but in terms of computer occupation, it comes down from 3 percent in January to 2.5 percent in May.
    • 70 percent of HIB visas go to computer occupation, the skills scarcity is very clear but the objective of doing it because of higher unemployment is probably not the right reason to look at and there is a limited economic justification for doing so.
  • History of H-1B visas told that it was brought in because it bridged the very critical skills gap for the industries and for the US economy and help in growth.
    • H-1B workers are essential workers because they are looking at maintaining critical infrastructure in the current pandemic whether its health, online education, vaccine production, and cybersecurity management.
    • Their loss will further cripple the economy of the US.
  • This is not an immigration issue; it’s a trade issue because high skilled worker's mobility does not impact the net migration number to a particular country (in this case the US).
  • H-1B visa holders are in high demand globally and the outsourcing of such talented workers which will back fire US.

Way Forward

  • Indian IT sector is indeed going to be impacted as a result of the move by US president to temporarily halt H-1B visas and other visas. But the damage is not going to be that extensive.
  • Relaxation will not be given until the presidential election in US. So, India needs to minimize its damage because it needs the US in the situation when it has disputes going on with China and Pakistan.

Main points made by Guests:

1. Prabhu Dayal, Former Ambassador:

  • Trump saying fulfilling his election promises. Till the election, this ban will be there.
  • Indian companies and Indian tech workers are going to be adversely affected.
  • It will somehow impact India’s relation with the US but India needs to minimize its damage. India needs the US because it has clashes going on with China and disputes with Pakistan.

2. Shivaji Sarkar, Senior Journalist:

  • Not only Indians but Americans also will be affected.
  • It’s not just posted Covid-19 situation, US president is always critical of immigrants.
  • H-1B visas are given to highly skilled workers so it’s going to hurt US companies.

3. Shivendra Singh, Vice President, Global Trade Development, NASSCOM

  • Tech industry is a very important constituent of the economy as far as India is concerned.
  • Out of the 191 billion dollar industry, we have nearly about 141 billion is exported and U.S.A is 62 percent of that (by far the largest).
  • Tech industry also contributes nearly 8 percent to the GDP and nullifies 50 percent of the Merchandise trade deficit in terms of contribution of Industry.
  • Indian techies are highly demanded all over the world, so their loss will hurt the US economy.

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