IT stocks plunge on Trump's H1B visa reform bill worries

Indian workers constitute the majority of the H-1B visa holders, with an estimated 86 per cent of the total H-1B visas going to them.

The H-1B program has been controversial, with employees at a number of companies (including The Walt Disney Co.) saying they were displaced from their I.T.jobs by workers brought in under the program via outsourcing companies and were forced to train their replacements in order to receive severance pay.

Businesses would have to try to hire American first.

Shares of IT companies plunged as much as 9% on Tuesday amid concerns that the new bill in the U.S. that aims to rework the H1-B visa programme will adversely impact the hiring plans of Indian technology firms. Indians received about 70% of all H-1B visas issued in 2016.

The Indian IT services may be hard hit by the Trump government's recent executive order by administration officials aimed at overhauling, among other things, the H-1B work-visa program that technology companies depend on to hire a substantial workforce each year, reports Bloomberg. And there are reports that President Donald Trump may sign a new executive order turning the proposals into law.

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However, the development is not likely to affect the business process outsourcing (BPO) industry as companies here are involved in off-shore jobs - not on-shore, the experts said.

A copy of the draft executive order for Trump's consideration, cited by Bloomberg, argues that "visa programmes for foreign workers ... should be administered in a manner that protects the civil rights of American workers and current lawful residents".

The bill introduced to the US House of Representatives proposes doubling the minimum salary of H-1B visa holders to $130,000 from $60,000. "Immigration of temporary workers to the United States will be completely thrown into turmoil, but it will also encourage USA businesses to hire talent in non-US countries in specific areas where they need the expertise", he said. Trump's nominee for attorney general, Sen.

After a year long ambiguity in immigration phenomenon, here came a moment when Donald Trump cleared the clouds slamming the Indians by raising the minimum cap salary limits. "It's only a question of when it will happen". IT majors such as Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra traded deep in the red. In 2014, TCS was granted 5,650 visas, more than the seven top US tech companies combined.

The previous President Barack Obama had extended the duration of optional practice training work visas, which was taken advantage of by the Indian students who stay a bit longer in the USA after the completion of their studies. "Everyone enlists themselves for projects that would enable them to go overseas".

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Industry lobby National Association of Software and Services Companies (Nasscom) said Lofgren's proposed Bill "definitely has an impact on the global delivery model", which, simply put, translates to executing a technology project using a team that is distributed across geographies.

President Trump isn't alone in Washington working to reform immigration, Congress is also working on reforms.

A spokeswoman for Infosys pointed out that there was a huge skills shortage in the US.

- The new rules are expected to overturn the existing duration of the optional practical training work visas known as OPTs, which are issued to students after the completion of their studies to gain work experience. "That approach has made corporate America very successful".

The phrase H-1B is the top trend on Twitter in India.

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"The best way to create jobs in America is to create companies in America", said Ganesan.


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