News » Headline » Donald Trump may ban H-1B visa for Indian IT service companies

Donald Trump may ban H-1B visa for Indian IT service companies

COLUMN: Trump is, however, flexible on key immigration issues.

By Sujeet Rajan

Sujeet RajanNEW YORK: Indian IT service companies who have large operations in the United States, and service business clients through temporary work visas like H-1B visa and L-1 visa, beware.  Businessman and leading GOP frontrunner in the presidential race Donald Trump, if he gets to the White House, may end that practice, ban Indian IT service providers like Infosys, TCS, Wipro, Mahindra and Cognizant, among others, from getting those visas, with the protectionist intention of creating more jobs for American workers.

Trump, who is fine tuning his stance on key immigration issues as he cruises through the GOP nomination race, made it clear in the last Republican debate in Detroit, Michigan, on Thursday, he’s changed his mind on two key legal immigration issues.

Trump said he’s keen to retain crème de la crème of foreign students who attend Ivy League schools (going by the names of institutions like Harvard, Yale, Princeton, and Stanford he took and has taken in the past), and import high-skilled immigrants, tap into their talents, help US industry. It was a rare instance of Trump publicly admitting an about face in a position.

Trump, who didn’t exactly say he would staple a Green Card to foreign students’ passport after they graduate from American universities, especially for those in STEM fields, like former Massachusetts Gov. Mitt Romney said during his failed campaign four years ago, has, however, been coming down hard on H-1B visas, as the election cycle progresses.

Despite rhetoric on welcoming high-skilled immigrants, Trump has also singled out specifically those H-1B visas which in his opinion are used by Indian IT service companies and staffed with cheaper labor. He opined such workers, through practices like ‘knowledge transfer’, displace American workers.

In the recent past, many big American businesses, like Disney World, Southern California Edison, Abbott Laboratories, Eversource, New York Life, among others, have used or plan to use this business model where a group of workers on visas like H-1B and L-1 displace American workers. Most such big contracts have been bagged by Indian IT service companies.

The humiliating part – the subject of which has seen testimony by some fired American workers on Capitol Hill last month – is also those fired American workers are forced to train their replacement workers, at the threat of losing their severance pay otherwise. Some of the jobs, or all, may eventually go back to countries like India. India’s IT outsourcing industry is worth a mammoth $146 billion.

Critics in the US argue that the Indian IT service companies who avail of services like ‘knowledge transfer’ are taking advantage of loopholes in US immigration laws. Workers on visas who displace in bulk American workers are hired for lower wages, have equal or inferior experience to workers they displace. That, they say, flout H-1B visa rules.

Trump’s campaign, after the Detroit debate, circulated a statement to the media, on ‘Donald J. Trump position on visas.’ It read:

“Megyn Kelly asked about highly-skilled immigration. The H-1B program is neither high-skilled nor immigration: these are temporary foreign workers, imported from abroad, for the explicit purpose of substituting for American workers at lower pay. I remain totally committed to eliminating rampant, widespread H-1B abuse and ending outrageous practices such as those that occurred at Disney in Florida when Americans were forced to train their foreign replacements. I will end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers first for every visa and immigration program. No exceptions.”

Trump also hopes to increase jobs for ‘women and minorities’ in America, by either banning H-1B visa or by reforming it. He has this statement on his website:

“Increase prevailing wage for H-1Bs. We graduate two times more Americans with STEM degrees each year than find STEM jobs, yet as much as two-thirds of entry-level hiring for IT jobs is accomplished through the H-1B program. More than half of H-1B visas are issued for the program’s lowest allowable wage level, and more than eighty percent for its bottom two. Raising the prevailing wage paid to H-1Bs will force companies to give these coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the U.S., instead of flying in cheaper workers from overseas. This will improve the number of black, Hispanic and female workers in Silicon Valley who have been passed over in favor of the H-1B program. Mark Zuckerberg’s personal Senator, Sen. Marco Rubio (R-FL) has a bill to triple H-1Bs that would decimate women and minorities.

“Requirement to hire American workers first. Too many visas, like the H-1B, have no such requirement. In the year 2015, with 92 million Americans outside the workforce and incomes collapsing, we need companies to hire from the domestic pool of unemployed. Petitions for workers should be mailed to the unemployment office, not USCIS.”

India is increasingly getting jittery about a Trump presidency. According to a Reuters report today, India is among a number of nations who have expressed displeasure and alarm over Trump’s racist remarks, especially against Muslims. The report noted that’s it’s rare for diplomats of countries to opine about a presidential candidate.

Read that story here:

India also recently took the US to the World Trade Organization over hike in visa fees, and what they felt was protectionist measures by the US in allocation of quota of H-1B and L-1 visas. The hike in visa fees is expected to hit Indian IT companies by $400 million a year. But that may seem trivial and insignificant if Trump comes to power and bans the H-1B visa for Indian IT service providers. India would, no doubt, take that issue with the WTO as well, if it comes to that. But the damage would be done. It would be hard for India to regain lost ground.

Trump’s rhetoric on jobs first for Americans has also implications for legal immigrants living in the US.

For somebody who has questioned the citizenship of his fellow contender Texas Sen. Ted Cruz, even threatened to sue him, it would make perfect sense for Trump to debar even Green Card holders and long-term residents who are waiting for their Green Cards from applying for and getting jobs at the expense of American workers.

Trump also has said in the past he wants to reduce and do away with family reunification visas, which would mean ending the sponsorship of relatives by citizens.

If Trump signs new laws which would require American corporations to adhere strictly to certain compliances in hiring and doing business with service providers overseas, it would see a massive upheaval in industry the like of which has never yet been seen in capitalist America.

However, as Trump demonstrated last week in his comments on high-skilled workers, the issue remains flexible.

For now, there’s every indication that Trump is gunning for Indian IT service providers, wants to get rid of them from the American workforce.

(Sujeet Rajan is Editor-in-Chief, The American Bazaar. Follow him @SujeetRajan1)

10 thoughts on “Donald Trump may ban H-1B visa for Indian IT service companies”

  1. Trump has good intents for US but one needs to examine each case rather than generalizing anti-imigrant policies. I have seen many very hardworking people working on H1b visa and there is a whole big recruiter economy that flourishes in silicon valley that sells skills of consultants who do not enjoy permanent jobs and yet contribute significantly to big IT companies. On the other hand I have seen that people with lesser skills rise high, get permanent jobs and end up playing regressive politics out of job insecurity and those are not work visa holders but permanent residents and US citizens. Trump needs to know who is actually contributing to economy and who is enjoying fruits of other’s hardwork. If he gets rid of really hardworking people from US, the jobs will transfer to countries like India which will be good for Indian Economy. Even with all good intent Trump will get negative result for his action.

  2. Trump is Racist and Xenophobic. His only goal is to dominate the world based on the color of his skin. He has so many businesses in the world where people work but he wants to be the “boss” as a white person and preaches hate. Nothing he says can really be taken for the truth!

  3. “If Trump signs new laws … it would see a massive upheaval in industry the like of which has never yet been seen in capitalist America.”

    Believe it or not, prior to 2000, Information Technology departments were 95% non-Indian. Computer systems were developed and supported very well with almost no help from Indians, and no thought of importing Indians to do it. The idea that Indians are needed to do STEM or are better at STEM is simply nonsense.

    The well-financed campaign to import Indians on H-1b visas – who cannot quit their jobs because their employers sponsor their visas and therefore control the workers’ very presence in the United States – to replace U.S. citizens and Green Card holders who can quit their jobs anytime and go work somewhere else was anti-Capitalist and anti-free-labor, and is long overdue to be reversed.

    Besides the highly skilled experienced Americans who are forced to train their Indian replacements prior to being fired, H-1b also undercuts intelligent young U.S. citizens who would like to go into STEM. American young people are not fools – they see that after paying for 4 years of college, few American STEM graduates will never get a job offer because the entry level jobs are reserved for Indians. How sick is that?

    If anyone is looking for a massive upheaval, the change from 95% non-Indian STEM staff to 95% Indian was it. Trump wants to right that wrong. The H-1b visa needs to be eliminated.

    1. Do you understand that the WTO mandates the free movement of people as part of the free trade policy that it promotes (WTO: Movement of natural persons, Mode 4) ? You cannot have free movement of American capital to countries like India, without Americans accepting professionals from these countries. They are all tied up. Last year WSJ reports, that US corporations repatriated almost $300 billion from overseas, and hold around $2.1 trillion in earned profits, again from investments made around the globe. Do you comprehend the enormity of the problem if this tap runs dry. But as Trump supporter you probably do not need to educate yourself on these complexities. Good that Trump has already said that he wants to tear up all those trade agreements. That will “make America white again”. We in India can survive without the Cokes & the Pepsis, you know, they frankly do not add much value anyway.

  4. For the last 15 years, the American government has given away the store, while only a handful of rich, greedy robber barons benefited from this outrageous worker replacement program.

    It’s time for America to look out for its own people now, just like India does, just like every other country does. Cancel the H-1b.

    1. Yes cancel the H1B and go back to your European/African sty. The American Indians have been wanting their country back for 400 hundred years.

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