Trump’s Protectionism Rattles Indian Emigres

Brijesh Patel, who has worked in California's Silicon Valley for 12 years, is contemplating relocating to his home town in Bangalore in south India.

The 39-year-old computer engineer fears that the new US administration's proposed radical changes to immigration policies will unleash protectionist, anti-immigrant and anti-minority havoc in a country that more than 2 million Indians call home. Even though Patel has a family in the US and plenty of Indian workmates, he says he and his friends have started seriously considering moving back.

Nor is it just ethnic Indians who are deeply concerned. On the other side, some of the biggest corporate stars in the US tech firmament including Apple, Google, Amazon and Uber say they face irreparable damage from the toughened US stance and are asking the president to reconsider making changes in his immigration policies. Some are even threatening legal action. There are an estimated million jobs vacant in the US in the IT sector that American companies have been unable to fill.

Analysts say the issue also threatens to derail the budding relationship between President Donald Trump and Indian Prime Minister Narendra Modi. The leaders have extended mutual invitations to visit their respective countries but a clash on visas could complicate the bilateral dynamic.

“We’re quite confused about what’s happening in this country,” Patel told Asia Sentinel in a telephone interview. “But those of us who're planning to go back anyway are thinking sooner is better than later as the work environment has become quite toxic.”

Corporations and individuals on both sides of the world are thus reacting like Patel because of the president’s stated aim to bulldoze through measures that would severely shrink the space for talented and technically qualified foreign workers to stay back in the country out of tragically mistaken belief that foreign workers are displacing American ones. Since his inauguration in January, three bills have been introduced in the US Congress which aim to restructure the H-1B visa programme, making it tougher for Indian firms to send employees to America.

Concern spread earlier this year when a 2007 bill was reintroduced to raise the minimum wage for H-1B visa holders from $60,000 to $130,000 a year to deter American companies from hiring technical Indian workers who snap up most of these coveted visas. A leaked draft of an executive order suggested the imminent overhaul of all American work-visa programs. Thus, when White House spokesman Sean Spicer stated that presidential and congressional action could be taken on H-1B visas as "part of a larger immigration reform effort," it made the Indian community very jittery.

Scores of high-profile Indians, including Google chief executive Sundar Pichai, are part of a large pool of Indians who travelled to the US on H-1B visas, an employment-based, non-immigrant visa category for temporary workers that allow foreigners to work in the United States for up to six years. An employer must offer a job and apply for the worker's H1B visa petition with the US Immigration Department.

H-1Bs are the most sought-after work visas. In 2016, the US Citizenship and Immigration Services received 236, 000 petitions within five days of opening the process, more than triple the number of mandated cap of 65,000 in the general category. The biggest beneficiaries of H-1B visas are Indians who receive nearly 86 percent of them, issued for workers in computer occupations.

The Trump administration has also proposed changes like giving preference to students educated in the US for H-1B visas as well as a crackdown on outsourcing companies that import workers for temporary training. One amendment also seeks to bar spouses of H-1B visa holders from working in the US. Talk of strict audit and vetting by the Department of Labor to clamp down on fraud or misuse of visas is further worrying Indians.

Rattled by Trump’s envisioned tightening of visa programs that Silicon Valley and their own industry rely on to attract talent, India’s largest technology company chiefs headed to Washington earlier this year to argue against the move to try and dissuade Trump’s team from raising requirements under the H-1B visa program.

The stakes in the US for India's IT outsourcing industry – worth US$108 billion – are indeed high. According to India’s the National Association of Software and Services Companies, the industry employs almost 4 million people. India earns more than US$60 billion from the American market by providing IT and engineering services to major US businesses.

Analysts say immigration reforms will not only curb that but could also choke future entrepreneurial zeal. According to research by Quartz, at least nine ‘unicorns’ – private start-ups with valuations of US$1 billion or higher –listed by the Wall Street Journal have a founder of Indian origin.

In March 2016, a study by the National Foundation for American Policy found that over half of the 87 unicorns listed in the Journal’s Billion Dollar Start-up Club were founded by immigrants. “With 14 entrepreneurs on the list, India was the leading country of origin for the immigrant founders of billion-dollar companies,” the report noted.

Indian student Parvathi Nair, who has always dreamt of working for a technology giant in the United States but fears that President Donald Trump's crackdown on immigration as well as on H-1B visas, which India's IT sector uses to send thousands of highly-skilled workers to America every year, will bottleneck her chances of getting a job in the US.

"The current environment is discouraging many Indian students from opting to study in the US," she says.

"Not only is the move a retreat from globalization, it will have potentially adverse consequences for globalized businesses like IT and affect major Indian MNCs like TCS and Infosys. Immigration restrictions will also affect the movement of talent from India to the US. Surely, as an astute businessman Trump realizes this," observes Prateek Khandelwal, head of human resources at a Delhi-based startup.

Foreign ministry sources told Asia Sentinel that Trump will likely proceed move more judiciously than the common wisdom suggest given the president's desire to maintain relations with Indian PM Narendra Modi as well as his keenness to improve the US economy. Some even feel that Trump's policies will not really adversely impact the Indian IT sector as Trump's protectionism, if it rages unchecked, would create an ecosystem that would foster development in India's own IT industry while making it more resilient to shocks.

Analysts add that visa restrictions for entrants into the US will now move more work offshore as the US is set to face a talent crunch in these specialized sectors. And Trump's protectionism is likely to only make things worse.

Neeta Lal is a Delhi-based senior journalist and editor. She tweets at Neeta_com