Nasscom’s Shivendra Singh decodes Trump’s H-1B visa freeze

The Trump administration’s latest ban on immigrant visas may have alarmed many, but Indian IT companies have been preparing for such an eventuality for some time now.

More than these companies, what would really get impacted from this ban is the American economy’s recovery from the pandemic, according to Shivendra Singh, VP & Head, Global Trade Developments, Nasscom.

Trump’s proclamation bans popular work visas – H-1B, H-2B, J and L visas – till December 31, 2020.

“The order won’t apply to those currently in the US, but we have to see how things pan out in the future. The important point to note is the proclamation exempts certain categories, especially the workforce critical and essential in helping American people and the US economy to recover amid the coronavirus pandemic”, said Singh.

While OECD has warned that US joblessness could reach the highest levels since the Great Depression, Trump administration has reiterated that this move will help keep a check on unemployment rates.

Singh, however, takes Trump administration’s rationale with a pinch of salt.

“Unemployment numbers in IT, where more than 70% of H-1B visas are issued, has declined from 3% in January 2020 to 2.5% in May 2020, whereas the numbers for other services have increased from 4% in January to 13.5% in May 2020. So, if the rationale was unemployment, then it isn’t right to restrict segments with low unemployment”, he said.

There is a severe skill shortage in the United States. Visas such as the H-1B help bridge that gap. With the ban in place, at least temporarily, companies depending on skilled foreign nationals will have to think up other ways to keep those operations going.

Busting a popular misconception – that of H-1B being the cheaper alternative to local hires – Singh said the advance skill set these workers possess is what makes the demand so high.

“If these visa holders are restricted for over a period of time then obviously, that pool of manpower becomes available for the global market and can add value to whichever place they join”, he added.

On making up for the loss in the American market, Singh said that even though others could not wholly replace the US, Canada was emerging as a strong alternative.

The US government decision to freeze immigration and suspend work visas leaves many stuck. However, it remains to be seen if this is actually an election-year move by Trump or a long-term policy the US is looking at.

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