Contrary to popular perception, it is big US tech giants such as Microsoft, Google, Amazon, et al, that benefit more from the H1B visa program than Indian tech majors. But the recent court order and Biden's promise of a more foreign worker-friendly visa regime promises to bring cheer to Indian IT professionals.
The recent order of the US judge staying the Donald Trump administration's temporary ban on H1B visas, among other work permits, is expected to be a positive for the Indian IT professionals. On June 22, the outgoing US President had signed an executive order to suspend several categories of visas for foreign workers till the end of the year. The court ruled that Trump had “exceeded his authority”. Apart from H1B visas, other visa categories such as H2B visas for non-agricultural seasonal workers, J visas for cultural exchanges and L visas for managers and other key employees of multinational corporations were also banned with effect from June 24.
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In a stinging rebuke to the President, the court said: “There must be some measure of constraint on Presidential authority in the domestic sphere in order not to render the executive an entirely monarchical power in the immigration context, an area within clear legislative prerogative... Such unrestricted authority would be contrary to Congress's explicit delegation of powers in foreign affairs and national security.” The executive order, which now stands suspended, came in the midst of the pandemic and in the run-up to the Presidential election, which was won by Democratic challenger Joe Biden, who, in any case, is much more sympathetic towards companies that had wanted the suspension on visas revoked.
At that time, the US Department of Homeland Security had estimated that these visas were responsible for about half a million job losses in the US. This had allegedly resulted in wages in some industries going downwards. With unemployment a major election issue, the restrictions on the entry of foreign workers had gained fairly wide bipartisan support from both Republicans and Democrats in the run-up to the polls.
The main argument in favour of the restrictions was that US and Indian companies use the H1B program to bring in cheap workers who are often not comparable to the best in the field and, contrary to the legal requirement, have skillsets that can be easily found locally in the US.
The ban had hit the $180-billion Indian IT sector, which depends on the US market for 60 per cent its revenues. H1B is a non-immigrant visa that allows US companies to employ foreign workers in jobs that need expertise that is not readily available in the US. US technology companies such as Microsoft, Oracle, Facebook, Google and others hire thousands of foreign professionals every year on this visa.
Though Indian IT professionals no longer apply for as many H1B visas as they used to, they still remain its single largest beneficiary group.
Then, many companies now prefer their employees to enter the US on L1 visas, which are reserved for experienced professionals who are already on the payrolls of firms that propose to begin or expand operations in the US.
Indian IT companies and the Indian subsidiaries of US tech giants are the biggest beneficiaries of L1 visas and account for 23 per cent of all such visas issued.
That is why an easy US visa regime is vitally important for the health of the Indian IT sector.
But there's another side to this story as well. Indian IT and ITeS companies were the main beneficiaries of the H1B visa programme till about a decade ago, but now it is the US Big Tech companies that sponsor the majority of H1B visa beneficiaries.
According to US government data, Amazon, Google, Facebook and other large US tech companies were the biggest employers of H1B visa holders. About 15 per cent of Facebook employees are H1B visa holders.
These companies, more than Indian IT majors, and several other US industries had opposed the ban. Following the court ruling in October, Linda Kelly, the Vice President of the US National Association of Manufacturers had said: “... decision is a temporary win for manufacturers committed to building that innovation in the United States. A long-term win for manufacturers requires policymakers to support meaningful reforms to our immigration laws that recognise the critical link between smart immigration policy and America's competitive advantage.”
With President-elect Biden having promised a liberal approach to issuing visas and given his commitment to reversing the current administration's hard-line policies on the issue, the IT sectors in both countries and Indian professionals, in particular, are expected to find the going a lot smoother in the days ahead.
This is expected to remove a major irritant in the otherwise robust India-US bilateral relationship, which many experts in both countries as well as around the world have hailed as the “defining partnership of the 21st century”.
But a retired Indian diplomat added a caveat: Despite Biden's promises, foreign professionals entering the US on work visas and working on US campuses will remain a sensitive political issue for a long time.