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Trump’s visa suspension ‘mildly negative’ for Indian IT firms, says rating agency ICRA
Trump has directed his officials to overhaul the H-1B programme to turn it merit-based by prioritising highest paid applicants.
US president Donald Trump signed an executive order suspending the various categories of visas for immigrants till the end of this year. But the move, a domestic rating agency said, is a “mildly negative” development for the Indian IT companies.
“The temporary suspension of issuance of fresh H-1B visas and L-1 visas (inter-company transfer) till December 2020 in view of the impact of Covid-19 pandemic on the US economy and employment will be mildly negative for the Indian IT services sector,” ratings agency Investment and Credit Rating Agency (ICRA) said.
The agency said that the petitions of India-based companies saw a 63 per cent decline in approval last year, compared to 2015. It said that only 6,855 H1-B visa applications were approved.
The agency attributed the decline sponsor employer’s inability to establish that the position is a specialty occupation, inability to substantiate a valid employer-employee relationship and lack of evidence of specific assignment at third party sites for the entire visa durations requested.
As a result, companies are relying less on such visas and building up domestic workforce in the United States, the ICRA said. “Cloud computing, digital services and automation are being used to reduce the reliance on manpower.”
However, the ICRA said, Trump’s decision will hamper execution of projects in the pipeline and new projects, and also dent margins because of higher local hiring activity.
Trump has directed his officials to separately overhaul the H-1B programme to turn it merit-based by prioritising highest paid applicants.
The suspended work visas included H-1B, H-2B for low skill workers, some categories of J visas for cultural and education workers and L-1 for intra-company transfers. They were intended to ensure Americans had the first shot at jobs in the aftermath of record job losses caused by Covid-19 related lockdowns, and are expected to free up 5,25,000 jobs.
The decision came as Trump od seeking re-election in the presidential election scheduled for November this year.