Fears of USA visa overhaul push Indian IT stocks lower
- Author: Rita Burton Feb 02, 2017,
Feb 02, 2017, 0:43
"The bill does nothing to address the underlying shortage of STEM-skilled workers, which has led all companies to have a calibrated strategy of hiring locally and bridging the skills gap by bringing skilled workers on non-immigrant visas including H-1Bs", it added.
Trump's administration has drafted an executive order to force busineses to try to hire an American first and if they recruit foreign workers, priority would be given to the most highly paid.
"Our country's immigration policies should be designed and implemented to serve, first and foremost, the US national interest", the draft reads, according to Bloomberg, which has viewed the copy and first reported on the matter. "The Lofgren Bill contains provisions that may prove challenging for the Indian IT sector and will also leave loopholes that will nullify the objective of saving American jobs, " NASSCOM said.
The bill, among other things, called for doubling the minimum salary of H-1B visa holders to $130,000 from the current minimum wage of $60,000.
"Every 10 per cent hike in H-1B can hurt earnings by almost 10 to 12 per cent of IT companies", Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.
The former US ambassador to India, Richard Verma, estimated previous year that 70% of the 85,000 H-1B visas issued annually go to Indian workers.
Arguing that they face a shortage of skilled USA workers, technology companies including Microsoft and Apple say they need more H-1B visas, while critics say the programme is used as a source of low-priced labour. Indians received about 70% of all H-1B visas issued in 2016.
Indian companies like TCS, Infosys and Wipro have large numbers of H-1B workers in the United States are required to declare that they will not displace American workers. "It is not a drop in need, it is a drop in the number of people willing to fill those needs", said the Newark, Calif. -based attorney.More news: Usain Bolt Will Lose Olympic Gold Medal; Jamaican Teammate Fails Drugs Test
Peddibhotla said there were several paragraphs of "unsettling language" in the six page order, particularly a directive that would mandate the Department of Homeland Security to "ensure that beneficiaries of the program are the best and the brightest".
Furthermore, she told India-West, the term "national interest" is vague, and not defined in the order, noting that the order mandates DHS within 90 days to determine whether foreign worker programs violate prevailing immigration laws and are not in the national interest.
"It is not known if Trump will stop issuing new visas or stop renewing existing H-1B visas - it's open for debate".
It's noteworthy that the draft does not target two of the largest guest-worker visa categories, neither the H-2A visa for seasonal agricultural workers or the H-2B visa for seasonal nonagricultural workers. The focus would be on highlighting the value contribution of India's IT sector as a "net creator" of jobs in the America.
"The proposed order will have a hugely detrimental effect on the USA economy".
Local tech leaders are concerned that a more restrictive H-1B program, if enacted, could impede recruitment for tech talent, including in Central Pennsylvania.
As soon as the news about the introduction of the H-1B visa reform Bill in the US House of Representatives came out, the Indian tech stocks went into a tizzy. Some also suggest that companies like Infosys, TCS, and Wipro might have to start thinking about offering new kinds of services such as cloud computing and artificial intelligence.