What is H1B1 Visa

India-US Visa-Related Issues

The US government has the provision of an H-1B visa. It is a non-immigrant visa for temporary workers. It is given for select special occupations. The issue is that in the US, if a company like an IT firm cannot find a skilled US worker, it can attract skilled workers under the H-1B programme. The US population is sceptical about the majority of the jobs being given to outsiders as they allege that firms hire from abroad to cut costs as labour is cheaper if imported and this undermines the employment to US citizens. Indian citizens are one of the largest H-1B users in the US. 

In 2015, the US administration under Obama signed Consolidated Appropriations Act, 2016. As per the law, the visa fee will be increased and the rise in cash flow to government coffers will be used for financing Obama's healthcare and biometric tracking System. The hike in the fees is going to offset IT and BPO exports of India.

With the coming of Donald Trump as the new US president, India and the US have had some irritants their bilateral diplomacy. The H-1B visa issues have emerged as one of the greatest source of friction between the two countries. An employer has to apply for an H-1B visa for the employee with the US immigration department. At the same time, there is one L-1 visa category, which is an inter-company transfer category where the foreign worker can be temporarily transferred to the US in an executive or marginal position in the office of the same employer or its branch or subsidiary. Donald Trump has advocated changing the immigration system of the US and has asserted to make it more merit-based. The main logic of merit-based immigration is to ensure that the immigrants entering the US are highly skilled and contribute to the American economy. The goal of the new system is to have less low-skilled immigrants.

In March 2017, the Trump administration decided that the government shall not undertake fast track processing of H-1B visa applications from 3 April 2017, for the next 6 months so that the US immigration authorities can analyse the H-1B extension applications of visa holders whose visas are on the verge of expiry. India has been an aggressive advocate of a fair and a rational approach to be adopted on visa related issues. India's Foreign Secretary S. Jaishankar had conveyed to the US lawmakers to treat the H-1B issue as a trade and service matter than treating it as an immigration issue. The private US firms can pay a premium of 1,225 US dollars per application. The payment of the premium ensures that the immigration department expedites the H-1B application and processes it in 15 days in contrast to the normal process of 6 months. The government of US has now stopped this practice. Under the Obama administration, a new H-4 visa programme was launched that enabled the spouse of the H-1B visa holders in the US to undertake jobs in the US. Trump administration has signalled a rollback of H-4 visa as well

The Trump administration placed the High-Skilled Integrity and Fairness Act of 2017 in front of the House of Representatives. The legislation has advocated for a market-based allocation of visas T legislation introduced mechanisms where companies can attract foreign talent by making it mandatory for Hu1B visa holder to have a minimum salary of 1,30,000 USD. This figure is double of what existed since 1989, that is, 60,000 USD. The legislation thus reduces the incentive to outsource jobs yet allowing an option to outsource jobs if the company expresses a willingness to pay. 

The legislation intends to promote fairness in hiring skilled workers globally by removing the per country cap for immigrant visa policy. To plug the loopholes in H-1B and L-1 visa programmes, the H-1B and L-1 visa reform acts were also envisaged In January 2017, the Protect and Grow American Jobs Act envisaged an increase in the minimum salary of H-1B visa holders and removal of the master's degree exemption. 

The H-1B reforms will affect Infosys, TCS, Wipro and so forth. More so, with the hike in the minimum salary for visa holders, the smaller firms may find it difficult to incur costs, thereby affecting their growth The profitability of the Indian IT sector would be affected as profits were maintained on the offshoring model. India has officially conveyed its concerns without taking up the matter through diplomatic channels. Indian firms in the US have now started recruiting domestic Americans as per the new requirements.