A Walk-Back

GS 2: International Relation

CONTEXT:

President Joe Biden allowed a ban on issuance of H-1B visas for skilled workers to lapse at the end of March 2021

Background:

Biden shows intent on reworking immigration rules by not extending H-1B visa ban

1) H-1B visa

What is it: The H-1B visa category covers individuals who “work in a speciality occupation, engage in cooperative research and development projects administered by the US Department of Defense or are fashion models that have national or international acclaim and recognition.”

Who’s covered: The H-1B is most well known as a visa for skilled tech workers, but other industries, like health care and the media, also use these visas.

2) H-2B visa

What it is: According to USCIS, the H-2B program allows US employers or agents “to bring foreign nationals to the United States to fill temporary non-agricultural jobs.”

Who’s covered: They generally apply to seasonal workers in industries like landscaping, forestry, hospitality and construction.

3) J-1 visa

What it is: The J-1 visa is an exchange visitor visa for individuals approved to participate in work-and-study-based exchange visitor programs in the United States.

Who’s covered: 
The impacted people include interns, trainees, teachers, camp counselors, au pairs and participants in summer work travel programs.

4) L-1 visa

What it is: The L1 Visa is reserved for managerial or executive professionals transferring to the US from within the same company, or a subsidiary of it. The L1 Visa can also be used for a foreign company opening up US operations.

Who’s covered: Within the L1 Visa, there are two subsidiary types of visas

  • L1A visa for managers and executives.
  • L1B visa for those with specialized knowledge.

President Trump’s Immigration Policy (America First Ideology):

  • President Donald Trump in June 2020, blocked the issuance of non-immigrant work visas of several types, including the skilled worker visa, or H-1B following the tightening immigration policy-aim of the policy was to stop foreign workers from decreasing American jobs.
  • protecting U.S. jobs for Americans, in the context of the economic distress associated with the COVID-19 pandemic, was a major immigration reform for President Trump
  •  By some estimates, H-1B visa applications of up to 219,000 workers were likely blocked.
  • Not only did the CEOs of Silicon Valley tech titans protest the clampdown on a key source of skilled labour driving their core operations, but some universities also filed lawsuits challenging a subsequent student visa ban last year, leading to a partial walk-back on the rules for the latter.
  • SpaceX founder & Tesla CEO Elon Musk and Apple CEO Tim Cook have expressed anguish against the policy.
  • Yet, this raised genuine questions about whether such rules would set back the U.S.-India relationship by impacting Indian IT services exported to the U.S.

H1B visas and their  Impact on India:

Mr. Biden’s action will have a significant and favourable impact for Indian nationals seeking employment with U.S. tech firms, as they garnered approximately 70%.of the 65,000 H-1B visas annually made available to private sector applicants other than students

 IT sector

  • Indian IT companies are amongst the biggest beneficiaries of the US H-1B visa regime and have since the 1990s cornered a lion’s share of the total number of visas issued each year.
  • As of April 1, 2020, the US Citizenship and Immigration Services (USCIS) had received about 2.5 lakh H-1B work visa applications, according to official data.
  • Indians had applied for as many as 1.84 lakh or 67 per cent of the total H-1B work visas for the current financial year ending March 2021.
  • India’s IT services exports to the U.S., which depend significantly on the H-1B visa, have been an important constituent element of bilateral economic trade.
  • Though the large Indian IT companies have cut down their dependency on H-1B and other worker visas by hiring as much as 50 per cent of staff locally, they still rely on these visas to keep costs in check.
  • Favouring highest-paid worker could result in a significant impact on margins and worker wages of Indian IT companies which send thousands of low-cost employees to work on client sites in the US. This, in turn, impacts their remuneration in the long term.

Impact on bilateral ties

  • An internal matter for the US: The freezing of non-immigration work visas is more of a US election-related issue rather than an indication of any mutual problems between India and the US.
  • India & the US share global strategic partnership, based on shared democratic values and similarity of interests on bilateral, regional and global issues.
  • However despite this strong bond and despite hectic talks at diplomatic levels between India and the US, the Trump administration decided in favour of implementing the ban.
  • The issue becomes a sensitive one as US cooperation becomes strategically necessary for India amid its border tensions and skirmishes with China.

Conclusion:

  • In allowing the H-1B visa ban to expire, Mr. Biden is walking a fine line between restoring the inflow of skilled workers into the U.S., a source of productivity-increase for its labour force, and not being seen as overly aggressive in unwinding Trump-era immigration policies.
  • Biden administration should continue to push gradual reforms that nudge the U.S. economy and global strategic position back toward an ethos of multilateral cooperation and bilateral progress with countries such as India, while however retaining a sharp emphasis on policies that further U.S. national interest in a dramatically transformed post-COVID world

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