New Delhi: With US President Donald Trump suspending H-1B, L and other temporary work permit visas, experts in India are of the view that though the move will hit the Indian IT sector the most, bilateral ties overall will not be affected.
They believe that Trump announced with an eye on the US presidential elections even as the move came under fire from heads of US tech companies and other business leaders.
Trump on Monday issued a proclamation temporarily suspending H-1B, L and certain other temporary work permit visas “to ensure we continue putting American workers first during our ongoing coronavirus recovery”, according to the White House. The suspension will remain effective till December 31.
Though this will not affect those holding such visas living in the US, others holding these and are outside the US will not be able to return during this period.
Indians receive around 70 per cent of the 85,000 H-1B visas issued every year and Indian IT companies are the biggest beneficiaries.
“The Indian IT sector will be affected because more of our people will not be able to go there,” Pinak Ranjan Chakravarty, former Secretary in the Ministry of External Affairs, told ETV Bharat.
“And hence companies there, including Indian companies operating there, will have to hire locally.”
Chakravarty is of the view that one immediate impact will be the rise in cost for these companies in terms of their financial outlay.
“The other is, of course, they will not be satisfied with the quality of the work because they will have people who are particularly not well qualified or knowledgeable. And that is one reason I think that will have an immediate impact.”
According to Robinder Sachdev, founder member of the US India Political Action Committee, Trump’s announcement will have an impact “of at least 20 per cent, if not more” on the IT industry.
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Sachdev is, however, of the view that Indian IT companies will now have to adapt as the Covid-19 pandemic has opened up tremendous new opportunities in the industry in the rest of the world.
“Business models are being reworked, working from home and so many other configurations have to be done,” he said.
“So, the Indian IT industry has scope also for a very bright future but it will have to adapt. Those who do not adapt will face virtual death over a while.”
Sachdev further said that that there is no certainty on the issuance of H-1B visas even after December 31, but the hope is that this can be compensated with the Indian IT companies getting new contracts through different business models.
But both Chakravarty and Sachdev believe that Trump’s move will not affect India-US bilateral ties.
“I don’t think it will have a huge impact (on bilateral ties) because it is a temporary measure,” Chakravarty said. “And (it is) motivated by President Trump’s eye towards the election campaign.”
He also pointed out that the ongoing pandemic has destroyed a lot of jobs pushing the unemployment quite high and more and more people are registering for state support.
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“So, I think it is an election-related move so that he (Trump) can go on the campaign trail and say ‘Look, I am creating jobs’ because he was riding high on the economy at one time till the COVID pandemic came and sort of destroyed the upswing in the economy that was taking place as it has done in other countries,” the former diplomat said.
Sachdev too believes that the suspension of these visas will not impact bilateral relations at all.
“This is something that will remain at the functioning bureaucratic level and it will not affect the bilateral ties at all,” he said.
“We understand that this is a step by Trump towards his internal domestic policies under the overarching perspective of immigration… as to how America looks at immigration.”
In terms of India-US economic ties, while Sachdev is of the view that it will have some effect in terms of figures for the IT industry this year, Chakravarty said that it will just be a “blip of sorts”
“I don’t think it is going to be a major, major point or bone of contention,” he said.
“I think we will ride over it because we have so many other interfaces and so many other interests to pursue.”
Chakravarty also pointed out to the strong criticism that Trump has come under from American business leaders and said: “I think, sooner or later, the business lobby is going to prevail and they will have to roll it (suspension of visas) back. As I said, it is an election-related move and I think it is going to be temporary.”
