As Australia, NZ follow US on visa curbs, can India do much?

US President Donald Trump may get pilloried in India for his plans to tighten the H-1B visa norms, but more countries are finding that formula to be popular and following suit in creating more restrictions – Australia and New Zealand being the latest. Of course, all these would affect Indian professionals much. While India has mostly been on a ‘wait and watch’ mode so far, the Centre is finally making some noise on the issue, even hinting at an aggressive stance. But, how far will India go?

The proposed changes around H-1B visas featured prominently in the talks between Finance Minister Arun Jaitley and US Trade Secretary Wilbur Ross in Washington on Friday. Jaitley while raising India's concerns over the Trump administration's move to tighten the H-1B visa regime, highlighted the key role played by Indian professionals in boosting the American economy.

Jaitley hoped that the US administration would take this aspect into consideration while taking any decision. President Trump had signed an executive order on April 18 for tightening H-1B visa rules, a decision that would impact India's $150 billion IT industry.

However, it was Minister for Commerce and Industry Nirmala Sitharaman who hinted at locking horns with the US by ways of retaliation against American companies operating out of India if the Trump administration goes ahead with the changes.

“It is not just that Indian companies are in the US, several big US companies are in India too. They are earning their margins, they are earning their profits, which go to the US economy,” Sitharaman said at an event on April 18.

Mint quoted Sitharaman as saying that the US and other advanced economies had provided a commitment to the World Trade Organisation (WTO) on the number of work visas that they are obliged to award to foreign workers every year. “At this stage, I can only say that we will ensure that we engage with them constructively. At the same time, I have no hesitation (in) saying that India will ensure that it shall not accept unfair treatment,” she said.

What are the proposed changes to the H-1B visa?

A major change to the H-1B programme being reportedly contemplated is raising the minimum salary at which companies could hire foreign employees on H-1B to $1,30,000. It was reported in January that The High-Skilled Integrity and Fairness Act, 2017, introduced by Congressman Zoe Lofgren, would more than double the wages at which foreign workers could be hired, thus making it expensive for companies to look to foreign talent.

How are Indians affected by proposed changes to H-1B?

Nearly 70% of total H-1B visas end up being awarded to Indian professionals, The New York Times reported in November 2015, quoting US government figures. Indian tech giants including Tata Consultancy Services (TCS), Infosys and Wipro are among the top 10 companies sponsoring H-1B visa workers, according to a list compiled by Fortune magazine.

According to an estimate, Indian IT companies earn 65% of their revenues from the US market. In fact, India's IT sector relies so heavily on the H-1B visa programme for its operations that their stocks fell by 9% when the changes were proposed.

Australia scraps visa, New Zealand tightens norms

Australia scrapped its popular 457 visa on April 18, a temporary working visa that allowed employers to turn to foreign workers to fill the skill shortage gap in the domestic labour market. Australian Prime Minister Malcolm Turnbull announced the decision via a Facebook video. "We’re putting jobs first. We’re putting Australians first," he said.

Australia, though, would introduce two new temporary workers' visas, with two and four-year expiry term, that would allow employers to hire foreign workers.

A day later, New Zealand's Immigration Minister Michael Woodhouse announced tougher requirements for skilled overseas workers as it tries to control immigration numbers that have reached an all-time high.

The changes include new income thresholds. To qualify as skilled, immigrants will need to get a job in which they earn at least the median income. To qualify as highly skilled, they will need to earn at least 150% of the median income. Other changes include a new three-year limit for workers with lower skills.

"We are absolutely committed to the principle of Kiwis first," Woodhouse said unabashedly.

How are Indians affected?

Australia’s decision to end the visa programme will impact Indian workers, who constitute the lion's share of 457 visa awardees. According to Australia's Department of Immigration and Border Protection figures, nearly 25% of the total 95,000 workers who were working on 457 visa hailed from India.

The majority of immigrants to New Zealand are from India, China and the United Kingdom.

However, with jobs becoming scarce and the economies moving at a slow pace, more countries are looking at ways and methods to provide employment to its citizens. Given this reality, it has to be seen how far India can push back the decision of these countries on visa restrictions. Or, is the tough stance just for popular consumption?