US President Donald Trump signed an executive order on Monday suspending new applications for a number of foreign worker visas until the end of 2020. This includes the H-1B limited-term work visa sought by tens of thousands of Indian citizens every year, .

Trump issued the order citing adverse conditions for the US economy in the aftermath of the Covid-19 crisis, which has caused a massive spike in unemployment in the country. But it also reflects the anti-immigrant politics that were a major part of his election campaign in 2016.

Here is what we know:

What does the new executive order do?

Beginning June 24 until the end of the year, the United States has now suspended a number of employment visas, including the coveted H-1B for highly skilled workers, among others.

That means no new H-1B visas will be issued at least until the end of 2020.

The order also suspends new applicants on the H-4 visa, for spouses of H-1B holders, and prevents multinational companies from moving their employees to US offices through the L visas. Besides these, the order suspends immigration under the J-1 visa for educational and cultural exchanges, and temporary workers in non-agricultural industries on H-2B visas.

The order will not affect those who are already in the US on H-1B and other visas or those who are outside the country but already have valid visas. It also provides for exemptions for health-care workers as well as those who work in the food supply chain.

How does the order justify this?

The official title of the order is “Proclamation Suspending Entry of Aliens Who Present a Risk to the US Labor Market Following the Coronavirus Outbreak”.

In April, US President Donald Trump had passed an order temporarily barring new immigrants for a period of 60 days, although that suspension did not cover immigrants already living in the US or foreign workers traveling for temporary work, including the H-1B visa.

The new order argues that allowing temporary workers into the country in the aftermath of the Covid-19 crisis will hurt the chances of the millions of Americans who ended up unemployed in recent months.

“Under ordinary circumstances, properly administered temporary worker programs can provide benefits to the economy.  But under the extraordinary circumstances of the economic contraction resulting from the COVID-19 outbreak, certain nonimmigrant visa programs authorizing such employment pose an unusual threat to the employment of American workers....

Between February and April of 2020, more than 17 million United States jobs were lost in industries in which employers are seeking to fill worker positions tied to H-2B nonimmigrant visas.  During this same period, more than 20 million United States workers lost their jobs in key industries where employers are currently requesting H-1B and L workers to fill positions...

The entry of additional workers through the H-1B, H-2B, J, and L nonimmigrant visa programs, therefore, presents a significant threat to employment opportunities for Americans affected by the extraordinary economic disruptions caused by the COVID-19 outbreak.”

What is the background to this move?

Donald Trump’s political stance has, from the very beginning, leaned heavily on anti-immigrant rhetoric, whether that refers to illegal migrants or those who enter the country on valid visas. Stephen Miller – the architect of Trump’s immigration policy – has long believed that restricting visas to guest workers and immigrants could reshape the American economy and ensure more employment for US citizens.

“The sum total of what these actions will do in terms of freeing up jobs over the course of the rest of 2020 is about 5,25,000 jobs,” a White House official told reporters on a conference call following the decision.

And it isn’t the last of the Trump administration’s plan to alter immigration policy.

Aside from barring work permits for asylum seekers and revoking work permits for those who have been ordered deported or those who have committed crime, the administration has also been looking at a big-picture overhaul of the H-1B visa programme. Some in the US believe that the H1B programme displaces American workers who might have otherwise received those jobs – though there is much disagreement in research circles about the validity of this argument.

The administration plans to do away with the H-1B lottery system, moving instead to keep the 85,000 annuals slots in the capped category for the jobs offering the highest salaries, as well as, according to the Wall Street Journal “tighten rules around H-1B workers assigned to third-party employers as contractors, and recalculate the wage scale to require companies to pay the visa holders higher salaries”.

Who will it impact?

The rule changes do not affect those who already have valid visas or are currently in the United States.

But for thousands of Indian citizens who are graduating this year, or were hoping to move to the US for work – either on the H-1B or L visa – their pathway to an American job has been made much harder.

There is some relief for graduating students. The Optional Practical Training programme, which allows recent graduates to work without a worker visa for one to three years depending on the industry, remains intact. This means recent graduates in STEM industries – science, technology, engineering and mathematics – can continue to work in the US for up to three years.

Indian nationals have cornered around 70% of the H-1B issued over the last five years, according to a statement by Indian External Affairs Minister S Jaishankar in Parliament, with most of those going to professionals in the IT sector. This is why the H-1B visa is often an item of discussion between the two countries in official talks.

In December, after a visit to the US, Jaishankar said:

“I sort of underlined our interest in ensuring that the flow of talent from India to the United States should not be obstructed and no unreasonable legislative provisions should constrain that. That was the subject which also came up when I was at the White House...

I cannot overstate the importance of the flow of talent for Indo-American ties. That was a point I make that look, this is important for you, it is important for us. It’s important for the relationship. So let’s work together to make sure this stays sort of open and vibrant and active.”

The Indian government is yet to comment on Trump’s new order.

The H-1B lottery for 2020-’21, in which American authorities select at random from successful applicants for the 85,000 visa slots available, has already been completed. Companies that put in successful applications and were hoping to have employees begin work in October, the start of the US financial year, will now have to wait at least until the start of calendar year 2021.

Coupled with the restrictions on the L visa, which allows for employees within multinational companies to be moved internally to US offices, this means the changes will also have a major effect on tech companies. As a result, Indian IT companies like TCS, Wipro, Infosys and HCL Technologies saw their shares drop in the Indian markets on Tuesday after the details of Trump’s order became clear.