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Wednesday, April 21, 2021

Explained: Trump’s H-1B visa ban has expired; what does it mean for India’s IT sector?

H1-B visa ban lifted: Global IT companies, industry bodies, and other global tech captains such as Alphabet and Google Inc's Sundar Pichai, Tesla CEO Elon Musk, had then condemned the June 2020 move and said that the H-1B visa regimes had a net positive impact on the US economy.

Written by Aashish Aryan , Edited by Explained Desk | New Delhi |
Updated: April 8, 2021 9:36:04 am
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US President Joe Biden on Thursday let a June 2020 executive order banning the issuance of new non-immigrant worker visas expire.

The executive order, signed by his predecessor Donald Trump, had barred the entry of eligible work visa holders, first for 60 days till August, which was extended till December and then March 31.

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What was the proclamation issued by former US President Donald Trump?

In June last year, Trump had signed an executive order barring the entry of H-1B and other foreign work visa holders citing it as an essential step to save the jobs of Americans who had lost their work due to the Covid-19 crisis.

In his proclamation, Trump had said that these US workers had been “hurt through no fault of their own due to coronavirus and they should not remain on the sidelines while being replaced by new foreign labour”.

“With some exceptions, we should not permit large numbers of foreign workers to enter the United States at a time when so many Americans are out of work,” an official statement by the White House had then said.

Among all the categories of temporary non-immigrant visas given to foreign workers, the H-1B remain the most famous, following by the L1 and the H-2B visa. Of these, the H-1B visas, which is issued to highly skilled workers in the information technology sector is cornered mostly by Indian workers employed either with companies or as independent contractors.

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Why did President Biden let the executive order by Trump expire?

Though the H-1B and other work visas have often been criticised for allowing cheap labour in the US at the expense of its local workforce, they have also proven beneficial to the US when it comes to getting inexpensive but highly skilled and trained workers.

Global IT companies, industry bodies, and other global tech captains such as Alphabet and Google Inc’s Chief Executive Officer (CEO) Sundar Pichai, Tesla CEO Elon Musk, had then condemned the June 2020 move and said that the H-1B visa regimes had a net positive impact on the US economy.

“Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today. Disappointed by today’s proclamation – we’ll continue to stand with immigrants and work to expand opportunity for all,” Pichai had then said on micro-blogging website Twitter.

Ever since Biden took charge, the industry captains had been asking the new administration to reverse the ban to allow them to hire new workers.

How does the expiry of the June 2020 order help Indian IT industry?

The US government has a cap of 85,000 total H-1B visas for each year. 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.

Indian IT companies are among the biggest beneficiaries of the US H-1B visa regime, and have since 1990s cornered a lion’s share of the total number of visas issued each year. Though over the years most Indian companies have reduced their dependence on work visa such as H-1B and L-1, they remain very popular among Indian workers overall.

H-1B visas are generally approved for a period of three years for a person, but many visa holders change employers to extend their US stay. IT companies, both Indian and global, hire from this pool of H-1B visa approved workers to already present in the US to keep their costs in check. Such workers are often hired by the companies as sub-contractors.

With the order having expired on Thursday, all the H-1B visa holders who had been impacted by the travel ban will now be free to go to back to the US and resume their work as an independent contractor as well. This in turn will mean the availability of a greater workforce for the IT companies.

The expiry of the order would also mean that all US diplomatic missions, present in various countries, would now be able to issue fresh worker visas, thereby allowing even the US based IT companies to start hiring foreign talented workers again.

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