H-1B visa Photograph:( Reuters )
Donald Trump said that the step was essential to help millions of Americans who have lost their jobs due to the economic crisis amidst the COVID-19 pandemic.
US President Donald Trump's move to stop issuing of H-1B visa and other work visas for the rest of the year may hurt the Indian IT industry's margins.
The proclamation that comes into effect on June 24, is expected to impact Indian IT professionals and several American and Indian companies who were issued H-1B visas by the US government for the fiscal year 2021 beginning October 1.
A Goldman Sachs Equity Research report said that Indian IT outsourcing companies have been consistently working towards reducing their reliance on H-1B/L1 visas since 2017, and focusing on the locally hired workforce to create more jobs in the US economy.
The Goldman Sachs report said local hires account for as much as 45-70 per cent of the employees in the US for the top 5 Indian IT service firms, reducing the dependence on H1-B visas.
Also Read: President Donald Trump signs executive order to suspend H-1B visas
Meanwhile, industry body Nasscom has termed the proclamation as "misguided" and "harmful to the US economy" and said this could possibly force more work to be performed offshore since the local talent is not available in the country.
H-1B visas are designed for certain skilled workers such as those employed in science, engineering, and information technology fields, while H-2B visas are given to seasonal workers such as hotel and construction staff.
L-1 visas are meant for executives who work for large corporations and J-1 visas are issued to research scholars, professors and other cultural and work-exchange programs.
Also Read: Reform H-1B visa system; move towards merit-based immigration: Trump to officials
Sundar Pichai, Indian-American CEO of Google, expressed disappointment over the proclamation, saying that immigration has contributed immensely to America''s economic success, making it a global leader in tech, and also Google, the company it is today.
Meanwhile, Indian-American Congressman Raja Krishnamoorthi said the H-1B programme, in particular, plays a crucial role in addressing the dangerous shortage of health care professionals while also providing other key sectors of our economy with talent from around the world to not only fill jobs, but create new ones.
Trump said that the step was essential to help millions of Americans who have lost their jobs due to the economic crisis amidst the COVID-19 pandemic.
(With inputs from PTI)