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US to limit H-1B visa for Indians to 15 per cent? All that IT professionals need to know about Trump move

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US to limit H-1B visa for Indians to 15 per cent? All that IT professionals need to know about Trump move

The US government has restricted the H1B visa grant for Indians to 15 per cent. The move is likely to affect the IT industry. The restriction seems like an after-effect of new data localisation rules in India.

Continuing on the ongoing trade tension between the US and India, the US government has said that it is planning to curb the distribution of the H-1B visa to Indians. The H-1B visa is one of the most popular ones for foreigners visiting the US for business or trade purpose. The move seems to have been triggered after the Indian government enforced stringent laws for data localisation for all companies based out of foreign countries.

The Trump government has so far been considering enforcing this decision for all countries that force foreign-based companies to store data locally in their countries. India is the latest country to do so and the visa-curb move seems to be an aftermath of this decision taken by India. India and the US have been through tension over trade and tariffs. This was first reported by Reuters.

While the Trump administration is yet to take a final decision on this matter, it could affect the IT sector a lot in India. In fact, it could affect all IT professionals who serve foreign countries or foreign clients from India. Here's a brief explanation of whatever has happened so far with regards to US H-1B visa restrictions for India.

US H-1B visa restriction: Why has this happened

Many countries have been lately enforcing data localisation laws for foreign companies. India is the latest entrant in this club and the new law requires all foreign companies to localize their data. The US has been opposing this idea and in a bid to force the foreign companies to withdraw this law, it is planning to curb the visa distribution. The Trump administration has been trying to ensure better trade opportunities for US-based companies for a while.

Data localisation is seen as a major benefit for any government of the world. With data stored locally, the local government will have more power and control over the data of foreign companies. This puts countries like the US at a major disadvantage. And, in times where data holds utmost value, data localisation laws could only empower a country with greater benefits.

The proposal is that any country that does data localisation, then it (H-1B visas) would be limited to about 15% of the quota. It's being discussed internally in the US government, said a Washington-based source to Reuters.

Both the US and Indian governments have withdrawn trade benefits for each other. However, the US government goes a step ahead and curbs the distribution of its H-1B visa for Indians to 15 per cent. India has been the only country that takes 70 per cent of the 85,000 H-1B visas applied annually. The H-1B visa is crucial for the IT sector in India.

US H-1B visa restriction: What could happen to the Indian IT sector

If the US government goes ahead with this decision, the Indian IT sector could suffer massively. India is one of the biggest countries to contribute to the IT sector in the US and the H-1B visa restriction could affect thousands of Indian IT professionals abroad. With lower allowance for H-1B visa to India, Indian IT professionals could struggle with IT jobs in the USA.

And not only IT professionals, but Indian IT firms could also face difficulties in serving their foreign clients. Major Indian IT firms such as TCS and Infosys could face difficulties in servicing their US-based clients which amount to a majority of their business. With restricted H-1B visas, these firms wouldn't be able to send their personnel to the US for servicing the clients. Indian IT firms rely on the H-1B visa send support staff to the US for maintenance and servicing.