Highlights of Trump orders on H-1B visa norms and what it means for India

Trump's order on H-1B visas could impact TCS, Infosys, other IT Firms

While on a visit to the headquarters of Snap-On Tools in Kenosha, Wisconsin, the US President Donald Trump ordered an interdepartmental review of the H-1B visa program on Wednesday. Buy American Laws - has one policy - Buy American, hire American and NEVER ever replace an American worker. Trump's long-awaited executive order drew sharp reactions across the globe. Change in H-1B visa norms could affect companies, such as Tata Consultancy Services Ltd , Cognizant Tech Solutions Corp and Infosys Ltd , that connect US technology companies with thousands of foreign engineers and programmers.

"With this action, we are sending a powerful signal to the world: We're going to defend our workers, protect our jobs and finally put America first," Trump said.

What Trump’s H-1B visa executive order actually does

1. It shall be the policy of the executive branch to buy American and hire American

2. Trump's "Buy American Laws" order is expected to tighten the process of issuing H1B visas and potentially create an “entirely new structure” for awarding these visas mostly used by technology professionals.

3. It allows companies to bring “skilled” foreign workers to fill jobs in the US for a few years. 

4. Trump said H-1B visa “should include only the most skilled and highest-paid applicants

5. The order states that the programme should never, ever be used to replace American workers.”

6. The executive order doesn’t change H-1B policy on its own, and it doesn’t set a timeline for when the review will be completed

7. Such a change could affect companies, such as Tata Consultancy Services Ltd , Cognizant Tech Solutions Corp and Infosys Ltd , that connect US technology companies with thousands of foreign engineers and programmers

Trump's long-awaited executive order drew sharp reactions from the opposition Democrat lawmakers and the sponsors of these legislations, but drew applause from the treasury benches.

India impact

Most Indian IT companies get over 60% of their revenues from the North American market and Indian nationals are the largest group of H-1B recipients annually.

Industry body Nasscom pointed out that the current campaign to discredit the over $110 billion Indian IT sector is driven by "persistent myths". 

Any change in visa norms can affect the movement of labour as well as spike operational costs for IT players.

"In general, we believe that the current campaign to discredit our sector is driven by persistent myths such as ideas that H-1B visa holders are 'cheap labour' and 'train their replacements', neither of which is accurate," it said.

It argued that any "onerous additional restrictions" on the H-1B and L-1 visa systems will hurt thousands of US businesses and their efforts to be more competitive as it will hinder their access to talent.

Infosys has said previously that it is ramping up work on on-site development centres in the United States to train local talent in an effort to address the visa regulation changes under consideration.

It warned last week that onerous changes to US visa rules could affect its earnings.

TCS says that it complies with local wages and would tweak its business model based on customer needs. Indian firms over the past few years have reduced dependency on H1B visas, while US firms such as Accenture, IBM and Google have stepped up hiring engineers from India and send them on the coveted visa. However, there has been no backlash by US administration on this.

 

What is H-1B visa programme

In brief, the H-1B visa program allows US employers to hire foreign specialty workers in technical and highly-skilled fields, like engineering, medicine, mathematics, and science. These workers receive a non-immigrant visa that can last as long as six years.