One such shock was felt in June when the Trump administration temporarily halted access to several work-related and study visas. Apart from students and professionals, it disrupted the plans of dependents of these employees and several companies. The move was widely criticised. Sundar Pichai, Alphabet CEO, tweeted, “…Disappointed by today’s proclamation — we’ll continue to stand with immigrants and work to expand opportunity for all.” Universities that get a lot of foreign students also cried foul.
Every year, Indians get a bulk of those US visas issued under four categories: H1B, issued to high skilled workers; H4, used by families of US-based employees; L visas for intracompany transfers, and J visas to study and work in the US.
The Trump administration had particularly targeted H1B visas and pushed companies to employ Americans instead. However, with the Joe Biden administration set to take charge in January, all stakeholders are hoping for more stability and liberalisation of rules that allow companies to employ foreigners.
The abrupt changes in visa rules foisted problems on companies. The pandemic added to the troubles by causing record unemployment in the US, which prompted tighter measures to control entry of foreign workers. Nasscom says the US has around 600,000 vacancies for computer software jobs but not enough skilled locals to fill those slots. Shivendra Singh, VP & head, global trade development, Nasscom, says, “In the last six months, there were a lot of measures to tighten rules on bringing foreign talent and preventing offshoring.”
All stakeholders, especially tech companies, are hopeful the Biden administration will remove the country-specific visa cap set by the US Citizenship and Immigration Services (USCIS). Jennifer Minear, president, American Immigration Lawyers Association, says, “Those seeking entry to the US on employment-based visas under a Biden administration can expect a much more predictable and smooth adherence to the actual law and a common sense approach to adjudication of visas.”
The biggest gainer of such an environment would be Indian tech companies with a large focus on the US. Of the $147 billion business Indian IT services companies did in 2019-20, 62% came from the US. Nasscom says Indians availed 72% of the 85,000 H1B visas issued in 2019. Though use of H1B visas by top 7 Indian IT services companies — TCS, Infosys, Wipro, HCL, L&T Infotech, Tech Mahindra & Mindtree) — has reduced from about 17% in 2015 to 6% in 2019.
The MD & CEO of Tech Mahindra, CP Gurnani, Tech Mahindra, says, “The new administration’s stated policy towards H1B visa is constructive and looks to attract more talent to the US.” On the issue of allowing spouses to work (on H4 visas), Gurnani adds, “This will create a source of talent that can contribute to the US and the global economy. It will be a positive step for the Indian industry.”
Like H1B, H4 visas were also targeted. Groups such as Saves Jobs America had claimed these impact local employment, a claim backed by the Trump administration but overruled by US courts in November 2019. Nevertheless, stable policies will help spouses and dependents of H1B holders get work. Minear of the American Immigration Lawyers Association says, “I think we will see a swift return to policies that are more in keeping with reality, encourage immigration, enhance the economy and create jobs, and not the other way round.”
Even US-based tech companies are backing a liberal policy. In September, 46 companies such as Apple, Google, Twitter and Facebook initiated steps to block changes to H1B, arguing that these will reduce their ability to hire highly skilled workers in America. Streamlining green card, visas and overall immigration processes will make the US more appealing for tech workers.
Favourable immigration policies can have a direct impact on the bottom line of companies. Omkar Tanksale, senior research analyst, Axis Securities, says the tighter and unpredictable visa regime led to service providers engaging subcontractors in the US to complete projects. “Around 5% of the total project cost went to subcontractors, impacting margins. Now the expectation is that companies will be able to ramp up deals quickly and reduce subcontracting expenses.”
However, such a regime might raise the salary bill of employees. A policy document issued by the Biden campaign had said he would try to “establish a wage-based allocation process and establish enforcement mechanisms to ensure they are aligned with the labour market and not used to undermine wages”.
In October, the Trump administration had hiked by 40% the minimum salaries paid to doctors and others coming on H1B visas. This was also done to protect American jobs, by making it costly to hire foreigners.
Jignesh Thakkar, partner, global compliance solution leader, EY, says, “The number of visas could expand, the wage-based allocation is likely to stay which will increase the wage cost of IT companies in India.”
Minear anticipates that some of the policy memoranda governing USCIS (like all employment-based green card applicants be personally interviewed) will be reviewed and rejected by the new administration since “they were hugely inefficient and their only purpose was to cause frustration and delay.” But it won’t all happen on Day 1 of the new president assuming office.
Peter Bendor-Samuel, CEO of research firm Everest Group, says the situation might not change that easily. “It is highly likely that the US is moving into a period where immigration of all types, particularly the highskill categories, is made much easier. The administration of the rules and laws (on visas, immigration) can change much faster but the rules themselves will take some time to roll back.”
But the new administration will be able to at least revert extreme steps, says Anil Gupta, who writes on US-based immigration forum AM22Tech. In the last couple of years, some H1B approvals were given for short duration, making it difficult to plan time-consuming projects.
Steven Alonzo, government affairs and PAC manager, US India Political Action Committee, says, “Ending per country caps and expanding green card availability for all skilled workers is a stated goal of the new administration. But the final makeup of the Congress will be a factor in how much of his pro-immigration agenda he can implement.”
Much like in any government, domestic interests, lobbies and unemployment rates will determine how much access the US can give to aspiring immigrants. Biden might rely on administrative changes, which can be implemented quickly, rather than change immigration laws which is a more long-drawn process.
The composition of the bicameral legislature can make it difficult for the Biden administration to change laws, says Bendor-Samuel. “Having said that, it is much more favourably disposed to immigration and the free flow of talent across borders, and so it will likely move to address the rules and the administration aspects.”
It would be safe to say immigrants can expect a patient hearing of cases and professionals can expect faster processing and quicker clearance of pending applications. But introducing new laws or changing rules could take longer. A concerted effort may start to show changes in around 18 months.
A Lesson: The Trump administration’s policies forced foreign students to look at non-US universities. The Biden administration is likely to introduce more student-friendly measures
The frequent change in US visa regulations in the past couple of years were unfavourable for students looking to enrol in colleges there. One of the main changes was in the optional practical training (OPT) scheme that allows students to work as they study, gain experience and earn to partly cover their expenses. This window was shortened from three to one year for students in the science, technology, engineering and mathematics stream. “With reduced OPT and H1B visas becoming difficult, students were forced to look at other options,” says MD of College Core Education Urvashi Malik, who has been counseling for two decades students looking at an overseas education.
America is still the largest market for students. “But rules limiting work options for students have led to rising interest in Canadian and Australian universities,” says Mukul Singh Sarang, director of Pune-based The Scholars Higher Education Route.
In 2010-11, the UK had withdrawn its post study work (PSW) programme — work permits for students — leading to a sharp drop in student population. PSW of two years was allowed when the UK felt Brexit pangs, leading to a rise in foreign students coming to British colleges. The students also bring foreign exchange.
Permits to work are a critical part in deciding the country to study in. For instance, between 2010 and 2016, the number of Indian students studying in Australia and Canada increased 125% and 240%, respectively, as compared with just 30% in the US, according to a note by MZM Legal, a Mumbai-based law firm.
The USA was a destination for about one million foreign students in 2019, of which 200,000 were from India, contributing $8 billion to the economy. Zulfiquar Memon, MD of MZM Legal, says, “Over 70% students preferred the US for higher studies five years ago. It has declined to less than 50% now.”
The pandemic has seen a rise in online learning, which has made students reevaluate the merits of expensive overseas education. “This makes it all the more important to have rules that help students,” adds Sarang.
Last year, the US planned to fix student visa terms to four years, with riders for extensions like “compelling academic reasons, documented medical illness or circumstances that were beyond the student’s control”.
Such provisions will make it difficult for postgraduate students planning to pursue a PhD.