The United States has told India it is considering putting a cap on H-1B work visas for countries that force foreign companies to store data locally, Reuters reported quoting unidentified Indian government officials. The Reserve Bank of India had in April 2018 asked payment firms to make sure that data is stored on local servers.
The H-1B visa allows US companies to temporarily employ skilled workers from abroad. More than three lakh Indians are believed to be on this work permit. This year, new rules were put in place for issuing the much-sought-after visa, the key change being that preference will be given to those who have completed their post-graduation or a higher degree from a US institute.
Two senior Indian government officials on Wednesday said they were briefed last week on a US government plan to cap H-1B visas issued each year to Indians at between 10% and 15% of the annual quota. At present, there is no country-specific limit on the 85,000 H-1B work visas granted every year, but an estimated 70% of the visas go to Indians.
The officials said they told the plan was linked to “data localisation”. Data localisation is a way by which a country places restrictions on data to gain better control over it and potentially curb the power of international companies. US companies have lobbied against data localisation across the world.
While issuing its directive in April 2018, the RBI had set a strict deadline of six months for compliance that some foreign firms, including Mastercard and Visa, had missed.
A source in Washington, who was aware of the India-US negotiations, told Reuters that the US was deliberating capping the number of H-1B visas in response to global data storage rules. The move was not solely targeted at India. “The proposal is that any country that does data localisation, then it [H-1B visas] would be limited to about 15% of the quota,” the source told Reuters. “It’s being discussed internally in the US government.”
Hours after the report, Ministry of External Affairs spokesperson Raveesh Kumar said that India has not heard anything officially from the US on the matter, the Hindustan Times reported. “We remain engaged with the US administration...and we have emphasised time and again at all our high-level interactions the contributions of Indian skilled professionals to the growth and development of the US economy,” he said.
Kumar added: “India’s position is in line with global best practices. We will remain engaged with the US on this matter and see how we can dispel any misconceptions on data localisation which they might have.”
The report came days ahead of US Secretary of State Mike Pompeo’s visit to New Delhi later this month. The relations between the two countries have been tense after India placed retaliatory tariffs on 28 products imported from the United States.
In March, US President Donald Trump had announced his decision to remove India from the Generalized System of Preferences programme. India was the biggest beneficiary of the GSP programme which allowed for $5.6 billion, around Rs 3,896 crore, worth of Indian exports to enter the country duty-free.