US President Trump took oath for the office a second time on January 20, 2025. India has been keenly following the statements coming from him and his supporters regarding the H-1B visa programme to understand the way forward on job opportunities for our workforce.

Why are Trump supporters against H-1B holders, legal immigrants? 

The H-1B visa allows skilled workers entry into the US. Visa validity is generally for three years, extendable by another three. 

Trump has historically spoken against illegal immigrants. Following his election, supporters of Trump’s MAGA (Make America Great Again) campaign felt that any backing for even legal, H-1B holders or aspirants went against the spirit of Trump’s own ‘America First’ slogan. Their ire was first directed at Sriram Krishnan, a person of Indian origin who was anointed Artificial Intelligence Policy Adviser in the new Trump administration. Right-wing influencer Laura Loomer has looked upon the H-1B as going against the spirit of ‘America First’. 

Vivek Ramaswamy, who will co-lead the government’s efficiency efforts, has also commented on meritocracy in the context of the H-1B visa programme. 

What is Trump supporter Musk’s views on the topic? What does Trump think of the H-1B visa programme? 

Elon Mask had said that he would ‘go to war’ to defend the H-1B programme as his own companies — SpaceX and Tesla — and hundreds of others had benefited from bringing in talent under the visa. However, he later clarified that the visa system was ‘broken’ and ‘needed fixing’. Following the backlash from MAGA voters, Trump himself had to come out in support of the programme and clarify that he liked the programme, as his own businesses had benefited from talent supply under the visa. 

Why is H-1B programme important to India? 

Since being introduced in 1990, the non-immigrant visa programme has seen annual visa issuances range from 65,000 to 195,000 and back again. Over the past two decades, applicants working in technology firms headquartered in India have been the primary beneficiaries. Indians currently account for about 75 per cent of H-1Bs. 

In the April-September 2024 period, one-fifth of the total H-1B visas issued were to Indian-origin companies. Of these, Infosys took the lead with 8,140 beneficiaries, followed by TCS (5,274), and HCL America (2,953). Infosys came second to only Amazon Com Services LLC, which topped with 9,265 visas. Cognizant, which has a significant employee presence in India but is headquartered in New Jersey, ranked third in the India list with 6,321 visas.

Did denial of H-1B applications go up in Trump’s first term?

In Trump’s first term that started in 2016, his administration raised scrutiny of visa applications and lengthened approval times. Consequently, denial of new H-1B petitions for initial employment saw some highs in that period. 

It rose from 6 per cent in FY15, to 24 per cent in FY18, before dropping to 21 per cent in FY19, 13 per cent in FY2020. It dipped to 4 per cent in FY2021, and fell further to 2 per cent in FY22, with the latter two years witnessing the lowest denial rates ever recorded. 

What if the cost of H-1B processing shoots up under Trump? 

If costs do rise, we can expect one of two consequences: Companies will either look for talent locally to avoid visa processing costs or employ foreign talent from other countries work remotely for them.

But the whole point of the H-1B visa programme was to bring in talent for skills that are not easily available in the US. As Musk himself said on Christmas day: “There is a permanent shortage of excellent engineering talent. It is the fundamental limiting factor in Silicon Valley.” America is currently struggling for want of STEM skills — ie., skills involving Science, Technology, Engineering and Math. 

An estimate by the US Semiconductor Industry Association there tells us, for the US economy as a whole, by the end of 2030, an estimated 3.85 million additional jobs requiring proficiency in technical fields will be created in the US. Of those, 1.4 million jobs risk going unfilled unless the country expands the pipeline for workers in fields such as skilled technicians, engineering, and computer science.

If US companies employ foreign talent to work remotely, India is the only country that can offer skilled software talent at a large scale. Over the past few decades, Indian companies have become more than somewhat familiar with the processes needed to deliver software deliverables from offshore locations. 

So, clamping down on H-1B will not help US employment?

No, curbing H-1B issuances will make work move out of the US via two channels: it could go to vendors to whom work could be contracted out, such as Infosys and TCS. Or large US companies could set up — and are already setting up — their own IT and/or BPO operations in India. These are called Global Capability Centres or GCCs. A significant portion of IT jobs created in India over the past year has been by these GCCs. 

An HSBC analysis tells us that there are more than 1,600 centres employing about 1.5 million professionals in India. At a projected market size of $110 billion by 2030, India’s GCC ecosystem has become ‘a cornerstone of global business innovation’, HSBC said.