Indian IT firms to gain as US court blocks Trump ban on H1B, work visas

Order says US President "exceeded his constitutional authority" in his move to ban issuance of non-immigrant visas aimed at creating more employment for American locals

Indian information technology (IT) companies and global tech giants may have reason to cheer as a United States (US) district court on Thursday blocked President Donald Trump’s ban on H1B, L and other work visas.

The order, issued by District Judge Jeffrey White of the Northern District of California, said Trump ‘exceeded his constitutional authority’ when, in June, he issued an executive order placing temporary ban on new foreign visas till the end of the year. The ban on non-immigrant visas was aimed at creating more employment for Americans. 

The lifting of the ban is seen as a positive outcome for Indian IT service providers who are the major beneficiaries of H1B, J and L work visas. Industry experts say that although 60 per cent of the top IT companies employ only locals and non-visa dependent staff, the ruling nonetheless offers a reprieve to the visa hurdles that are taking place as the US heads into a presidential election next month.

“The news is positive for the Indian IT sector. Now new employees can be deployed if there is any project that needs to be ramped up or faces a short-term skill gap,” said Sanjeev Hota, head of research at Mumbai-based brokerage Sharekhan. “However, our discussions with companies suggest that they are still not keen on making employees travel. The top five IT companies are anyway aggressive on their local hiring and offshoring strategies to dodge visa issues in the long term.”

The ruling applies to workers with companies represented by the plaintiffs in the suit - the National Association of Manufacturers, the U S Chamber of Commerce, the National Retail Federation and TechNet. However, policy studies and media reports suggest that there is no restriction on any new company joining these organisations to benefit from the ruling prospectively.

Congress’s delegation of authority in the immigration context does not afford the president unbridled authority to set domestic policy regarding the employment of non-immigrant foreigners. Such a finding would render the president’s Article II powers all but superfluous,” Judge White wrote in his order.

Industry experts say the tussle will likely move to an appeals court as it is at odds with a Washington District Court ruling given last month.

This development comes days after the same court had granted another favourable ruling for the visa holders. A preliminary injunction was passed against the US Citizenship and Immigration Services’ fee hike that was scheduled to come into effect from October 2.

 Legal experts said H-1B applicants would otherwise have paid an additional $4,000 per application in future.

The federal agency had put forward a proposal to hike the fees for H-1B high-skill visas by 21 per cent to $555 while that for L (intra-company transfer) visas has been increased by 75 per cent to $850.

The US government issued over 188,000 H-1B visas and 125,000 H4 visas in the calendar year 2019, according to its Bureau of Consular Affairs website.  The major beneficiaries in both cases were Indians.

The government also issued over 75,000 L1 and L2 visas each during the same period.