The Centre said it was studying the implications of the Australian government’s decision to scrap a visa programme that benefited Indians, and warned that the move could have an impact on negotiations on the free trade agreement — Comprehensive Economic Cooperation Agreements (CECA) — between both countries.

“The government is examining the consequences of the new policy in consultation with all stakeholders. This is also a matter we will be looking at in the context of CECA negotiations,” the Ministry of External Affairs spokesperson said.

On Tuesday morning, Australian Prime Minister Malcolm Turnbull announced that he was scrapping the Australian “457” visa programme that allowed Australian companies to hire Indians in a number of skilled jobs.

He said he would replace the programme with a more stringent system, making it difficult to hire non-Australian citizens. “We are an immigrant nation, but the fact remains — Australian workers must have priority for Australian jobs.”

The Australian Prime Minister added, “We'll no longer allow 457 visas to be passports to jobs that could and should go to Australians.”

Amongst the measures planned are reductions in the tenure of many of the visas from four years to two years, the Australian government said.

According to the notification, the new visa programme will cut more than 200 eligible jobs for skilled migrants — from 651 to 435, visa fees are set to increase, and the visas will be restricted to filling “critical skills shortages”.

The announcement appeared to have taken New Delhi by surprise, especially given that the Australian Prime Minister had visited India only last week.

Although the joint statement issued by India and Australia after the meeting between Prime Minister Narendra Modi and Mr. Turnbull on April 10 spoke about cooperating to stop “illegal migration”, it gave no indication that the two sides had discussed the proposed measure to scrap the skilled worker visa programme.

In Delhi, the Australian High Commission sought to play down the impact of the decision.

“India provides the highest number of temporary skilled workers to Australia of any country; eight out of the top 10 occupations for Indian 457 visa holders (as at December 2016) were IT professionals,” Australian High Commissioner Harinder Sidhu said in a release. According to the Australian Department of Immigration and Border Protection, Indians constituted 76% of the total ‘457’ visas issued in the three IT streams, and 57% of permanent migrant visas issued in the skilled stream of workers last year.