In his latest border-closing move, US President Donald Trump issued an April 18 executive order to review the H1-B visa program, which enables educated migrants with specific skills to work temporarily in the US.
Silicon Valley was critical of Trump’s move, saying that there is a shortage of qualified Americans working in the industry. US companies, especially those in the technology sector, often employ H1-B visa holders to fill positions that are difficult to recruit for within the country.
Beyond hurting American tech companies, the executive order would disproportionately impact one international ally: India. Over 70% of all H1-B visas issued each year are given to Indians, and 85% of H1-B visas in the technology sector go to Indians.
India-based outsourcing companies Tata Consultancy Services and Wipro processed 7,149 and 4,022 H1-B visas, respectively, for American firms in 2014, according to the New York Times.
Trump’s executive order follows through on his campaign pledge to “buy American, hire American”. The H1-B review is intended to tackle “fraud and abuse” in the system and may impose greater regulation, such as raising salary thresholds and only awarding visas to the most highly-educated and skilled applicants among those who qualify.
India-founded firms have an important presence in the US, and many CEOs of Indian origin, including Sunder Pichai from Google, have expressed disappointment with Trump’s policy review.
They claim that the Trump administration statement about H1-B visa holders being “cheap labour” that “displace[s] American workers” is inaccurate.
And in what seemed to be a response to the executive order, the Bangalore-based Indian technology company Infosys announced on May 2 that it would hire 10,000 American workers in the next two years.
Infosys currently employs some 200,000 people in several offices worldwide and plans to open four new hubs in the US “focusing on cutting-edge technology areas, including artificial intelligence, machine learning, user experience, emerging digital technologies, cloud, and big data”, according to a recent press release.
The first hub is set to open in the state of Indiana in August 2017.
Trump’s executive order sends a strong signal to New Delhi, which is a strategic ally for the new US administration. Trump has called India a “true friend” to the US.
Though Prime Minister Narendra Modi has refrained from discussing the issue publicly, Indian officials have expressed disappointment, saying that US companies based in India will be affected. Members of the prime minister’s cabinet have also voiced concerns.
Indian professionals in the US are strong contributors to the American economy, they note, and thus to the global economy.
The result of the move, it is hinted, could be a trade war between the countries.
The rise of multinational Indian tech firms such as Infosys, Tata, Cognizant, and Wipro (leading the IT outsourcing Indian industry valued at US$150 billion) have employed a generation of well-educated workers.
Other Indian IT professionals migrated to the US, filling, among other positions, a large labour gap in that country’s surging technology market. Indian Americans now represent the second largest diaspora in the US, totalling two million citizens.
A majority of these Indian American citizens identify as Democrats but during the 2016 presidential election, a small and highly visible minority of Republicans emerged.
The grassroots initiative “Hindus for Trump” and the policy-oriented Republican Hindu Coalition (RHC) both openly endorsed Trump’s candidacy in the 2016 election. The RHC acts as an advocacy organisation to be the “bridge between the Hindu-American community and Republican policymakers and leaders” on issues pertinent to the US and India, such as trade and political relations, as well as security cooperation on Islamic extremist terrorism.
Chicago-based industrialist and billionaire Shalabh Kumar, who has been dubbed “Trump’s favourite Hindu”, is the co-founder of the RHC along with the Republican Newt Gingrich, a former congressional leader and presidential hopeful. Kumar, a prominent Trump booster, donated $US1 million to Trump’s campaign in 2016.
Recently, Kumar was named by the weekly India Today as one of the top 20 “global Indians”, and has an ear in the White House as part of the Asian Pacific American Advisory Committee and the National Committee of Asian American Republicans.
At a February 2017 press conference, Kumar assured reporters that there would be no executive order on H1-B visas and that, to the contrary, the number of migrant workers would increase. He has yet to make a public statement about the Trump administration’s recent decision.
This situation highlights the tension Trump has faced at many moments in his young administration: in appealing to his nativist American base, he alienates other key demographics. The H1-B order may turn off wealthy Indian American Republicans, who are potential political and business allies.
It could also hurt the US economy. The Hindustan Times says that a significant number of Indians living in the US may now be looking for a job “back home”.
Donald Trump has invited Narendra Modi to visit the US later this year. It remains to be seen whether a trip (to, presumably, Mar-a-Lago) will help smooth the H1-B waters between these two “true friends”.
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