US President Donald Trump’s decision to suspend the coveted H-1B visas until the end of the year is likely to have a significant impact on India: after all, around 70% of these over the last five years have gone to Indians. Trump’s administration insists that this move will ensure jobs go to Americans rather than foreigners.
Scroll.in spoke to Shivendra Singh, Vice President and Head of Global Trade Development, of NASSCOM, the trade association of Indian IT firms, about why the US is curbing critical-skills visas that make up a tiny part of the US workforce and the impact of this suspension on India and the US.
Edited excerpts of the interview:
How important is the H-1B visa to India and the US? How important has it been in the recent decades?
There are two parts to it. H-1B visas have a very important role in bridging the critical skills gap that exists in the US. And about 75% of the visas in the capped section go to Indian nationals. That is testimony to the skill set Indians possess, and also to what is needed that are in scarce supply as far as the US is concerned.
Dozens of research papers and documents point to the fact that these visa-holders play a very important role in bridging the skills gap and making the US economy competitive and what it is today. So when we look at the US proclamation, we see that this will create a negative impact on the US’s economic recovery.
NASSCOM president Debjani Ghosh tweeted that this is especially bad for the US economy and innovation, that too at a time when the US should be doing all it can to build back up the economy. Could you speak to the basis of that statement?
If you look at the American folks, I’ll point out a few examples – Senator Lindsey Graham who’s the chair of the Senate Judiciary Committee highlighted that a temporary shutting down of non-immigrant visas will create a drag on the US economic recovery. Similar comments from Elon Musk, Sundar Pichai, and the US Chamber of Commerce CEO.
And the reason is twofold: one is the critical skills gap… It is not correct to cite the overall unemployment figures to take action against a segment since computer-related occupations [have] the lower degree of unemployment.
The numbers are as follows: unemployment figures in the H1-B, for which typically 70% and above is computer occupation, has come down from about 3% in January 2020 to 2.5% in May 2020. Whereas if you look at the occupations overall, [unemployment] has gone up from 4.1% to 13.5% in May. We currently have 625,000 open job vacancies in the computer occupation. And again, the majority of them are the H-1B visas. So, if you look at these numbers, it clearly specifies that even though you have a large degree of unemployment, jobs are going unfilled here.
Because a lot of the work that the H-1B workers are doing is the essential work of maintaining critical infrastructure in this current time of the pandemic. Whether it’s maintaining hospital infrastructure, preventing cybersecurity attacks, working on the development of a Covid-19 vaccine, online education…
What about on the Indian side? Particularly if this ban is extended beyond 2020, what do you think will happen to domestic Indian companies, especially the IT industry and jobs? Will people have to start looking to other countries like the UK or countries in Western Europe?
Yes, [the US] is crucial, they’re important. But let’s look at the scenario. As of now, the period of impact is between now and December. Till October, you will anyway not have travel because of the various restrictions; people are not going to be traveling for work... And we only hope that it doesn’t cross that because then a number of things can happen.
Number one, these people who are in short supply and high demand globally will obviously go to different markets and add value to different markets in terms of contribution. For example, this week, NASSCOM organized an online trade mission to Canada. We had 63 participating delegates, which is the highest we’ve ever seen. That clearly suggests that even in this Covid-19 recovery period, we have the highest level of interest there.
There could also possibly be more offshoring if this happens. There could be people coming back here and adding value to the companies here [in India], whether it is startups or major companies. They would add more value and innovation in the economy. So the situation continues to evolve and we only hope that the temporary period is restricted and doesn’t go beyond the 2020 period.
An American Immigration Council report said that increasing H-1B visas could add as much as $158 billion in GDP by the year 2045. And in terms of diplomatic relations, Indian External Affairs Minister S. Jaishankar said that he cannot possibly over overstate the importance of the flow of talent for Indian-American ties. Are there any forecasts from your end, or what do you think this will hold for the future of India-US ties?
I hope it’s temporary because the order issued is a temporary order. It’s not a permanent order in any form. But also, I’ve used my lens on purely the Indian side or the Indian tech industry. They have contributed to – if you look at research from IHS Markit last year – they’ve contributed more than $57 billion in GDP to the US economy, which is more than the GDP of five individual US states. So you can see the contrast.
The Indian tech industry has added nearly 177,000-280,000 direct jobs in the US. If I look at the direct and indirect, it’s nearly half a million jobs, and most importantly, they’ve worked with most of the Fortune 500 companies based in the US, contributed to their economic growth, and also contributed to the US economy. So given this, we need to look at the rationale behind the objective.
[Also] what are these numbers? [The 85,000 H-1B petitions each year] do not even comprise 0.05% of the US workforce. So that’s also something of a minuscule number in totality.
Final thoughts?
We wouldn’t be speaking if this didn’t happen six months back. The new normal has changed for everyone. I’m so proud of our tech industry, which has really shifted about 95% of the 4.3 million people who have worked from home very seamlessly, without causing disruptions, and while continuing to add value.
Also, the [H-1B visa holders] are ‘non-immigrant’ visa holders. These are not immigrants. Which could be seen as an immigration issue, which could be seen as a high-skilled worker mobility issue, which is a trade issue, because it does not impact net migration numbers.
Out of the $191 billion which is the [IT] industry’s revenue, nearly $141 billion is exports, and out of that 62% is the US market. And the tech industry in India is about 8% of India’s GDP. So it’s very important in the export story for the entire country. And hence, we need to ensure that this continues to go on with relative seamless challenges coming down across the board.