US mulls caps on H-1B visas to deter data rules: report

The US has told India it is considering caps on H-1B work visas for nations that force foreign companies to store data locally, Reuters reports, citing sources with knowledge of the matter.

The plan to restrict the H-1B visa program, under which skilled foreign workers are brought to the United States each year, comes after firms such as Mastercard and Visa have lobbied hard against data localization rules around the world.

Unidentified Indian government officials were quoted as saying that they were briefed last week on a US government plan to cap H-1B visas issued each year to Indians at between 10 percent and 15 percent of the annual quota.

There is no current country-specific limit on the 85,000 H-1B work visas granted each year and an estimated 70 percent go to Indians.

According to the Indian officials, they were told the plan was linked to the global push for “data localization”, in which a country places restrictions on data as a way to gain better control over it and potentially curb the power of international companies.

Since last year, the US government has been upset that American firms suffer due to regulations in several countries that it says are protectionist and increasingly require companies to store more data locally.

While governments the world over have been announcing stricter data storage rules to better access data in their jurisdictions, critics say restricting cross-border data flows hurts innovation and raises companies’ costs.

In March the US Trade Representative highlighted "key barriers to digital trade", citing data-flow restrictions in India, China, Indonesia and Vietnam, among others.

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