America's H1B protectionism is set to benefit India. Here's why
Indians seeking H1B work visas in the US may lose out on new opportunities, but in an economic sense, those very opportunities may shift to India like it did in the 1990s and 2000s.
by Madhavan Narayanan
Updated 31 Dec 2024 13:52 IST
Officially, H1B visas are long-term non-immigrant permits for those engaged in speciality occupations that require high skills. (File photo) Photograph: (Reuters)
Anyone watching the ideological shootout within the American right wing as Donald Trump gets set to take charge for a second term in the White House should realise a simple truth: the United States is entering an era of all-round protectionism, spanning capital flows, consumer goods and labour.
Unless Trump does a careful balancing act or a U-turn, we are heading for a year of serious policy changes officially aimed at his "Make America Great Again" (MAGA) agenda but in effect challenging the business-as-usual style in which Silicon Valley has led a global surge in technology and innovation, helping US domination in the world economy.
But the inference from this would be more complex than it may appear at first sight.
As I see it, once the game gets down to details, Indians (and others from outside the US) seeking H1B work visas and better lifestyles in the US may lose out on new opportunities, but in an economic sense, those very opportunities may shift to India like it did in the 1990s and 2000s when "offshoring" became hot.
The difference is that this time, India is in an even better position to tap opportunities because the size of skilled and experienced knowledge professionals, infrastructure development, and communications bandwidth are far superior.
Officially, H1B visas are long-term non-immigrant permits for those engaged in speciality occupations that require high skills.
The year 2024 is ending in America with serious disagreements between the folks we call Trumpists. Technology billionaire Elon Musk officially supports the H1B visa as a vehicle to attract talent on merit, but has calibrated his position to seek "reform" in the system after a backlash post that says the H1B programme is only aimed at recruiting technology and financial service professionals at "relatively low wages" and not to draw "top talent."
That should not make sense on close examination.
Better work that produces better results attracts better wages -- and quibbling over what is "top talent" is a difficult game to play where employers are ordinarily the best judges of what talent is. But the pushback Musk is facing is symptomatic of the protectionism in which an "America first" policy for local citizens (Read: mostly white, less competitive technology workers) are expected to get priority.
Former Trump White House strategist Steve Bannon wants an outright scrapping of H1B visas and has even issued a warning to Vivek Ramaswamy and Musk, the co-chiefs of Trump's DOGE (Department of Government Efficiency).
To leave little to doubt on the kind of hate that is going around against Indians, there is a viral video of far-right commentator Stew Peters and comedian Leonarda Jonie spewing venomous racism against Indian immigrants.
With that kind of atmosphere, H1B may be a difficult thing to sustain and even more difficult to grow. Trump is certainly in a bind.
Musk wants to raise the minimum salary for H1B visa approvals but that is hardly of relevance beyond a point. Last year, as much as 69% of those gaining from H1B visas with a salary below $100,000 per year were Indians. The number of employees covered by H1B visas totalled less than 54,000 of which 65% were for "computer-related" operations.
Now, contrast that with some interesting data on global capability centres (GCC) of multinational companies functioning in or from India. According to industry association Nasscom, as many as 1,700 GCCs in India employed nearly 1.9 milllion people in the fiscal year ended March 2024, generating more than $64 billion in annual revenues. The government's economic survey for the year said as many as 42% of GCC employees were engaged in engineering, research and development. A study by consulting firm Zinnov noted that these included artificial intelligence and machine learning experts needed at the cutting edge of global business.
In plain English, India now has the scale, base and processes necessary to absorb all the H1B visa holders hired over the past decade, should that need arise. Some enhanced infrastructure facilities may be a clincher, but that is relatively easy in the current scenario.
It is a naive thought to imagine that businesses deploying capital would meekly accept the narrow-minded Trumpists who do not understand the larger dynamics in a world in which everything from cryptocurrency to robotics and genomics needs a solid technologically educated workforce. If not India, they may settle for other countries to deploy or hire talent. European countries are already waking up to the prospect of hiring talented Indians.
The irony is that in defending less than 100,000 jobs per year on a liberal count, the United States, which has a total of 168 million people in its civilian workforce, may be losing its grip on global technological leadership -- not to speak of small business growth aided by guest workers and rich immigrants.
Extreme-right Trumpists seem to be adept at cutting America's nose to spite its technological face. It is their choice.
P.S. On the downside of H1B returnees, Indians may have to worry more about narrow local roads choked with outsized Audis, Jaguars and BMWs, unless the government puts new-age cities on a fast-track model.
Opinion | Indians seeking H1B work visas in the US may lose out on new opportunities, but in an economic sense, those very opportunities may shift to India
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