H-1B Visa Imbroglio

Author:   Dr. M. Mahalingam, Research Fellow, Centre for Policy Analysis, New Delhi

H-1B Visa Imbroglio

Dr. M. Mahalingam


As part of larger immigration reforms, the newly elected Republican government being led by Donald Trump had recently issued a draft executive order to review or overhaul of H1B work visa, because of this visa programme encourages cheap labour force from abroad leading to job cuts for the American workers. In this regard, a team has been constituted by Trump administration to prepare a detailed report within nine months on various existing work visa categories and its implications on the job prospects of US citizens. Besides, the team is working on the modalities by which ‘the best and the brightest’ to be issued H1B visas as the existing model has fault lines, that need to be plugged in.  In fact, the protectionist and populist measures of Donald Trump would have a backlash on the globalized US economy. ThoughH1B visas are mainly related to scientific or technical jobs, it is much sought after one among the Indian IT professionals.

In Retrospect and Prospect

H1B visa is a non-immigrant visa that allows American firms to employ foreign workers in special occupations that require theoretical and technical expertise.H1B visa scheme came into existence after the enactment of the Immigration Reforms and Control Act in the year 1990 for the immigration of high skilled people like scientists and engineers only at the beginning.Under the H1B visa programme, the US government provides a maximum of 85, 000 visas --- out of which 65, 000 from abroad and the remaining 20,000 for the foreign students studying in the US. In 1998, it was amended by the US Congress during the Y2K issue to permit IT professionals. The Senate passed an immigration reform bill in 2013 which was aimed at raising the cap from 85, 000 to 1,35,000 but was stalled in the House of Representatives by the Republicans as it has a provision leading to get citizenship finally.In the year 2015, the fee for H1B visa and L1 visa was hiked from $ from $2000 and $ 2,500 respectively to $4000 and $4500 respectively.Though H1B visas are related to high skilled workers immigration like scientists and engineers, but more than seventy percent are being used by IT companies at present. H1B visa is quite popular among the foreign high skilled  immigrants especially Indians, because, it  is a long visa which permits to work for three years initially and a possible extension of three more years, that eventually leads to obtaining green card or permanent citizenship in the US. 

H-1B Visa Issued in the year 2014 


Receiving  Country















South Korea



United Kingdom














Source: Adapted by Author from US Department of Homeland Security

Gleaned from the above table, India is the top most recipient country and the demand has been on the rise. As PTI reported recently, the US government had already received about 2, 50,000 H1B visa applications for the financial year 2017, which is significantly more than the cap of 65, 000. It seems that H1B visa has fostered the growing number of the high-skilled migration of Indians to the United States. The proliferation of Indians to the United States has resulted in the transformation of Indian community from ‘insignificant other’ to ‘significant other’ in the US public sphere now.

Pros and Cons

The proposed restriction for issuing H1B has more negative implications than positive ones for the US economy.The tightening of H1B may pave a way for an increasing intake of local talents, but theUS has still skill shortageto fill in vacant technical tasks. To attribute this point, the US Labour department has predicted itself a shortage of 2.4 million STEM or science, technology, engineering and mathematics graduates till 2018. Under this circumstance, the protectionist measure would strangulate the growth of the US economy. Further, US based fortune 500 companies are highly dependent on the IT service providers who recruit the Indian IT professionals directly or being sourced by the Indian IT outsourcing companies through H1B visa scheme.In fact, the technology giants like Facebook, Google, Intel and Cisco systems among the firms lobbied Congress to increase the numberof H1B visas.Moreover, the limitation on H1B would surge the onshore or near shore work contracts given the cost and skill advantages leading to economic growth benefits for other countries and thus will impede the growth of US economy.

The critics argue that the H1B visas are substituting the US workers, they may sound right in a sense, at the same time, no one can deny the fact that as H1B workers often bring their families along, they would  fuel the local economy like transport, real estate, banking  and hospitalityindustries as well.  Further, to dispel the myth that Indians are grabbing the high skilled jobs from the locals, the NASSCOM reported that the Indian IT industry in the US has provided 4, 11,000 direct and indirect jobs and has been paying taxes around $5 billion taxes annually. Moreover, while twenty percent of the H1B visas are allocated for start-ups and smaller firms employing around fifty people, resulting in growing innovation and entrepreneurship in the US. Those who came to the US for higher studies from abroad through H1B visa are heading the giant US based companies and contributing to the GDP growth of US. The proposed move would definitely hamper the spirit of innovation and entrepreneurship.In general, the tightening of H1B visa scheme will impinge of the burgeoning India-US trade relations in the recent years.

Brain Gain for India?    

The interesting fact is that the restriction for the emigration of Indians to the United States is not a new phenomenon. As history reveals, the Immigration of Law of 1917 and the US Supreme Court ruling of 1923 were the anti –Indian immigrant measures.The proposed Immigration reform is one such latest development to contain the inflow of Indian immigrants to the US. After the advent of H1B visa scheme, the Indian high skilled migration gained momentum especially IT professionals. Even though the Indian IT professionals are the modern day indenture labourers under the mechanism of H1B visa, they preferred to  move in large numbers as they had enjoyed better living conditions than India coupled with aconducive atmosphere for the development of innovative culture in the US. The recent announcement for the capping of H1B visa would be a much advantage for India as it would resist the emigration of the best and brightest from India. In other words, the ‘brain drain’ would significantly be reduced instead brain gain for India.  At present, the Indian government is pushing for ‘start-up culture’.The return migrants and others can actively take part in it for making India as a global technology hubin near future.

In Lieu of Conclusion

In the era of globalization, the world economy is more interconnected or interdependent and overlapping than ever before in various ways and means. America cannot be an immune to the phenomenon or influence of globalization. The isolationist measure like ‘America First’, ‘Buy American and Hire American’ by the Donald Trumpadministration is not on the basis of economic rationale of any kind, it is nothing but populist measures for political mileage.  


Dr. M. Mahalingam, Research Fellow, Centre for Policy Analysis, New Delhi


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