india

Updated: Jun 21, 2019 13:17 IST

The United States has no plans to cap H-1B visas, the state department said in a statement on Thursday.

Reuters news agency had reported Wednesday that the United States is considering caps on the H-1B visa programme for countries that force foreign companies to store their data locally, a move that is being seriously considered by India, with a legislation to codify it on the anvil.

Shares in Indian IT firms had fell in early trading because of the report, as reported by Reuters. Wipro Ltd fell nearly 4% and Infosys and TCS fell more than 2% each. “The broader Nifty IT index’s 1.8% fall was its biggest intraday percentage decline in over five weeks,” Reuters had reported..

The news report had, thus, raised major concerns in New Delhi and Washington DC, coming as it did just days before Secretary of State Mike Pompeo’s visit, which was in danger, as a consequence, of being dominated by hostile reactions from the Indian government and businesses.

“The US has no plans to place caps on H-1B work visas for nations that force foreign companies to store data locally,” a state department spokesperson said in a statement to Hindustan Times, addressing the Reuters’ report’s central contention that the Trump administration was considering the move as a punishment for India in an ongoing trade war.

The spokesperson went on to state, in a possible attempt to shield the secretary of state’s visit, “During his June 12 speech, Secretary Pompeo highlighted the significance we attach to the US-India relationship, and noted he looks forward to his trip to New Delhi next week to advance our strategic partnership.”

Pompeo reaches New Delhi on June 24.

Indians have been the largest recipients of H-1B visas — which are given to highly skilled foreign workers hired by American employers to make up for a shortage of local hands — accounting for more then 70% of the 65,000 congressionally mandated annual cap, with an additional 20,000 to those with advanced degrees from American institutions of higher learning.

The Reuters report said the Trump administration was planning to cap the intake of Indians at 15% of the annual quote as part of an action against nations that force foreign companies to store locally generated data on local servers. Visa, American Express, Facebook, PayPal, Mastercard and Google are likely to be impacted if the Indian government enforced localization acting on a recommendation by the Reserve Bank of India.

The state department statement made clear that the US is not planning any move to cap H-1B, to counter data localization by India.

It could not be immediately ascertained if a move was under way to enforce a country-cap, and not necessarily as a retaliatory action. A response was awaited from the US department of homeland security, the lead agency on these matters that is spearheading President Donald Trump’s overhaul of the immigration system

“The Trump Administration’s Buy American Hire American Executive Order called for a broad review of U.S. worker visa programs, including the H-1B program,” the state department spokesperson said in the statement, adding, given the context, “This review it is not targeted at a specific country and is completely separate from our ongoing discussions with India about the importance of ensuring the free flow of data across borders.”.