Indian IT firms to be hit as Trump signs order to bans H1B Visa; US Firms disagree with the move

The Trump Government on Tuesday extended the 60-day ban on immigration and non-immigrant worker visas. All kinds of Visas are banned till December-2020. Further, work visas including H1B Visa will remain suspended. Certain categories of H-4, J, and L visas will also remain suspended till the end of the year, an official release stated.

It added:

Many workers have been hurt through no fault of their own due to coronavirus. 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.

The Trump Administration will also close loopholes that have allowed employers in the US to replace American workers with low-cost foreign labour. But like we said before, we understand the sentiment. Still, Industry leaders warn Trump of repercussion.

Indian IT Sector affected through H1B Visa ban

Over 3-4 lakh H1B visa workers in the US are employed by Indian IT firms. These include Infosys, Tata Consultancy Services (TCS), Wipro and Cognizant. The tech industry relies heavily on the H1B visa program to have low-cost foreign labour.

But the statement also said that this will drive both the wage-level and the skill-level of the H1B Visa applicants up. Sure, it will eliminate competition with Americans. But, it will only reduce American competition in these industries at the entry-level. So, how Americans will fill in for senior positions, it is still unknown.

Thus, the long term ban of H1B visa will hurt the project deliverability of Indian IT services firms because of shortage in the talent. This is because these companies recruit workers for specialist positions in fields such as IT and science.

American Firms and Industry leader on the H1B Ban

Sundar Pichai, Alphabet and Google CEO, tweeted that:

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.

— Sundar Pichai (@sundarpichai) June 22, 2020

Andrew Ng, Co-Founder of Coursera, said:

The suspension of the H1B visa program is bad for the US, bad for innovation, and will shatter dreams and disrupt lives. As a former H1B visa holder, my heart goes out to all the families affected.

— Andrew Ng (@AndrewYNg) June 23, 2020

Aaron Levie, Magician @box, said:

This administration has no concept of what makes America competitive or great. They do, however, know how to implement policies that are cruel, divisive, and counterproductive to our progress. This must stop.

— Aaron Levie (@levie) June 23, 2020

He also said that this was an unbelievably bad policy on every level. It meant more jobs move outside the US, and in no way made America better or more competitive.

Facebook told NBC this:

So, seeing the responses, this might not be good news to India or America.