US Bans Work Visas Impact On India

Table of Contents

What is a Visa?

A visa is an official document that allows the bearer to legally enter a foreign country.
The visa is usually stamped or glued into the bearer’s passport.
There are several different types of visas, each of which afford the bearer different rights in the host country.

The US work Visa allows foreign nationals to work in the United States.
There are various types of Visa issued by USA-H-1B and H-2B, H-4, J, and L visas.
Non-Immigrant Visas.

In order to fill a vacuum of in IT and other related domains,
The US administration issues a certain number of visas each year which allows companies from outside the US to send employees to work on client sites.
Lottery system
Of these work visas, the 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.
Of this, 65,000 H-1B visasare issued to highly skilled foreign workers.
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.
Can stay for maximum of six years.
Even though the H-1B visa is a non-immigrant visa, it is one of the few US visa categories recognized as dual intent.
It means that the H-1B visa holder can apply for and obtain a US Green Card while in the
US on an H-1B visa.
The US government also issues L1 visas which allows companies to transfer highly skilled workers to
US for a period of up to seven years.
H-2B visas allow food and agricultural workers to seek employment in the US.

The US administration on Tuesday said it was extending the 60-day ban on immigration and non-immigrant worker visas till the end of 2020.
Visas including the much-coveted H-1B and H-2B, and certain categories of H-4, J, and L visas shall remain suspended until December 31, the White House said in a press note.

The technology boom coupled with the arrival of the internet and low-cost computers in developing nations such as India and China saw a large number of graduates willing to work at relatively low costs in the US,
A win-win situation for both employer and the employee.
However, it has since often been criticised for sending low cost workers to the US at the expense of domestic workers.
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.
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.

Indian IT companies are amongst the biggest beneficiaries of the US H-1B visa regime.
As of April 1, 2020, the US Citizenship and Immigration Services (USCIS) had received about 5 lakh H-1B work visa applications, according to official data.
Indians had applied for as many as 1.84 lakh or 67% of the total H-1B work visas for the current financial year ending March 2021.
Apart from the suspension of these work visas, the executive order signed by Trump has also made sweeping changes to the H-1B work visa norms, which will no longer be decided by the currently prevalent lottery
The new norms will now favour highly-skilled workers who are paid the highest wages by their respective companies.
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.
Though the large Indian IT companies have cut down their dependency on H-1B and other worker visas by hiring as much as 50 per cent of staff locally, they still rely on these visas to keep costs in check.