According to three available sources, India has been informed by the US about its plans to consider nations that enforce local storage of data in foreign companies for the H-1B work visas cap. This is to widen both countries’ row over trade and tariffs.
Under the H-1B visa program, the United States accepts skilled foreign workers annually. The restriction of the program is planned ahead of the US secretary of state’s visit to New Delhi.
India, which is the biggest beneficiary of this visa as most of her nationals work Indian Tech companies has upset firms such as Mastercard and by extension the US with its strict new rules on storage of data storage.
Recently, there have been trading tensions and tit-for-tat tariff actions between India and the United States, in the form of warnings. After a key privilege for trade in New Delhi was withdrawn by Washington, tariffs were hiked on certain US goods in India since Sunday.
On Wednesday, two senior government officials from India reported that they were alerted in the last week, on the plan by the United States government to reduce the annual H-1B visas allocated to Indians to the range of 10% and 15% annually.
There is no current specific limit placed on the 85,000 H-1B visas for a country annually, but Indians get almost 70%.
According to a source from industry in Washington which was aware of the negotiations made by India and US said that capping the number of H-1B visas was the deliberations of the US in response to the global rules governing the storage of data. But the source stated that not only Indians were targeted.
According to the source, the proposal stated that about 15% of the H-1B visas would be allocated to any country that performs data localization, and this was an internal discussion by the US government.
When requested for comments, there was no response by the US Embassy in New Delhi. However, questions were referred to the state department by a US Trade Representative (USTR) spokeswoman, but a response was not immediately received.
The most affected firms, due to these caps, will be Tata Consultancy Services followed by Infosys Ltd. These companies depend on the visa program to bring developers and engineers to the US. India’s IT sector, which is worth over $150 billion, will also be affected.
The US administration, since last year, frowned upon the fact that firms in the US like Visa and MasterCard are suffering as it has been regulated in most countries that data should be stored locally by companies.
While the global government thinks their jurisdiction would gain better access to data due to the strict storage of data rules announced, raising companies’ costs and hurting innovations are what critics would be the results.
Last week, Pompeo reported at a US-India Business Council event, that free flow of data across borders would be pushed by the US administration to aid US companies and secure the privacy of consumers.
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