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Daily News Analysis

Explained: What US job curbs mean for Indian H1-B holders

5th August, 2020 International News


  • US President Donald Trump signed an executive order barring federal agencies from hiring H-1B visa holders and other foreign workers in place of US citizens or green card holders.

Who is given such visas?

  • 65,000 new visa applications approved every year, an average 1,800 to 2,000, or roughly 3%, are H-1B visas granted to workers employed by federal agencies.
  • To keep costs in check, federal agencies in the US — and various other countries — either hire a large number of foreign workers or outsource their back-end database updation and other jobs to business process outsourcing firms from around the world.
  • Such jobs in developed countries pay minimal wages, which are not lucrative enough for employable individuals in these countries.

How will the new order impact Indian workers in the US?

  • Apart from workers hired by federal agencies, the executive order will also impact workers of Indian companies that are on contract with federal agencies.
  • Bigger federal agencies such as state-run banks give the contract for supply and maintenance of their databases and other services to bigger Indian companies such as Infosys, TCS, or Wipro.

What does the new order say?

  • The executive order has called upon federal agencies to stop replacing US workers and green card holders with H-1B visa holders or other foreign workers.
  • The heads of departments will undertake an audit of these contracts and subcontracts, and check whether the jobs could have been performed by US workers, and whether opportunities for domestic workers were impacted by such hiring.

What led to the order?

Ever since Trump became President in 2016, the US government had started moving towards a more conservative work visa regime, alleging that Indian and Chinese IT companies had been sending workers at very low cost, which hurt the prospects of skilled workers in the US.

The immediate trigger for the executive order was an announcement by the federally owned Tennessee Valley Authority that it would outsource 20% of its technology jobs to foreign countries.