US considering caps on work visas for Indians as bargaining chip

Guests hold the flags of the United States and India at the White House in Washington. REUTERS/Jim Young/Files

NEW DELHI (Reuters) – India is in talks with the United States on H-1B work visas but has not heard anything official from Washington on capping such permits for Indians, the foreign ministry said on Thursday. 

Reuters reported on Wednesday the United States had told India it was considering caps on H-1B work visas for countries that force foreign companies to store data locally, according to sources familiar with the matter.

Asked about the report during a news conference, foreign ministry spokesman Raveesh Kumar said there had been no official communication from the United States on the issue.

“We have not heard anything officially from the US government. We continue to reiterate and engage with the US government on this matter,” Kumar said, without elaborating.

News of the US plan to restrict H-1B visas comes days before a visit to India by US Secretary of State Mike Pompeo. Disagreements between the countries over trade have resulted in tit-for-tat tariffs in recent weeks.

Two senior Indian officials said they were briefed last week on the US plan to cap the number of H-1B visas given annually to Indians at between 10% and 15% of the total number issued.

There is no country-specific limit on the 85,000 H-1B work visas that the United States grants each year, and an estimated 70% of them go to Indians.

Indian IT stocks fell on Thursday following concern about any work visa curbs. Indian tech lobby group Nasscom said such a US plan would imply a “further crunch” for businesses in the United States getting skilled workers.

Sources said the US proposal was linked to a push by many governments for “data localisation”, in which a country places restrictions on data flows to gain better control over it, and curb the power of foreign firms. The plan, if implemented, would also apply to countries other than India, the sources said.

US firms have lobbied hard against data localisation rules around the world.

India’s data storage rules announced last year upset US payment companies such as Mastercard.

India is also working on a broad data protection law that would impose strict rules for domestic processing of data it considers sensitive.

Kumar said the Indian government remained in talks with the United States on the issue of data localisation.

The government would also take a decision on involvement of Chinese telecom giant Chinese telecom giant Huawei Technologies Co in 5G trials, based on India’s economic and security interests, Kumar said.

The global roll out of 5G technology has been complicated by U.S. sanctions against Huawei. US officials have lobbied allies not to use Huawei network equipment in their 5G networks.

The United States has stepped up pressure on its big trading partners since President Donald Trump took office. 

Trump has made use of tariffs to punish trading partners like China, the European Union, Canada and Mexico, saying they flood the United States with cheap products and put up unfair economic barriers at home.

Kumar said the overall direction of ties with the United States was positive. Defence relations have expanded with the United States becoming one of India’s top arms suppliers, replacing traditional partner Russia. 

(Reporting by Neha Dasgupta; Writing by Aditya Kalra; Editing by Sanjeev Miglani, Robert Birsel)

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