US temporarily suspends H-1B Visa: How is it going to affect India?

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The US administration on Tuesday extended the 60-day ban on immigration and non-immigrant worker visas till the end of 2020. S President Donald Trump called for a temporary suspension of the H-1B visa system and has directed his administration to move in the direction of merit-based immigration, as per White House officials. In addition to this, H-2B and certain categories of H-4, J, and L visas shall also remain suspended until December 31.

H-1B, H-2B, L and other work visas are issued in order to fill a vacuum of highly-skilled low-cost employees in IT and other related domains, the US administration issues these certain visas each year which allows companies from outside the US to send employees to work on client sites. Of all these visas, H-1B remains the most popular among Indian IT companies.

The US government has a cap of 85,000 total H-1B visas for each year. They are distributed through random lottery. Of this, 65,000 H-1B visas are issued to highly skilled foreign workers, while the rest 20,000 can be additionally allotted to highly skilled foreign workers who have a higher education or masters degree from an American university. President Trump is now calling for the lottery system to be scrapped and instead use a salary ranking selection procedure so that the top 85,000 salary offers get the H-1B visa.

Why did the US suspend non-immigrant worker visas?

With the technology boom, there was an arrival of the internet and low-cost computers in developing nations such as India and China. This made a surge in numbers of graduates that wanted to work at relatively low costs in the US. It was better for both, the employer and the employee.

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In January 2017, after taking over as the president of the US, Trump had hinted that the low-cost workers were hampering the economy and undercutting jobs of citizens. The US had then hinted at reforming the “broken” H-1B visa system.Trump seized the opportunity provided by the economic contraction due to Covid-19 by first banning the entry of non-immigrant workers till June 23, and then extending it till December 31.

Properly administered temporary worker programs can provide benefits to the economy
-US President Donald Trump

It’s impact

With the temporary suspension of the aforementioned visas 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. 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.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.

Impact on India

This is making a lot of Indian students who are studying abroad and want to work in the US or Indian employees already working in the US very anxious.

  • 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.
  • The suspension of temporary work visa permits is bad news for fresh engineering graduates from India seeking job opportunities in the US. They will not be able to secure a temporary US work visa permit for the rest of this year.
  • Students don’t seem to have much to worry about if they want to study abroad in the US; on the other hand, this might even be good news for those already studying abroad there.
  • With this, unemployment may further rise in India.
  • The above point can be proved with a fact. A PTI report from April said 67 per cent or over 1.8 lakh of the total 2,75,000 H-1B applications were from India in 2020-21. However, the number of H-1B visas issued by the US government was earlier capped at 85,000.
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Written by Ayushman Ojha, a Journalism student at Delhi School of Journalism, Delhi University. Covers Politics, Education and International Affairs.

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