Trump team's public spat on H-1B visas may be over, but debate likely to begin

The public debate among some of the team members of Donald J Trump, president-elect of the United States, over the use of H-1B visa seems to have subsided after Trump himself took sides with those who favour its use. The debate was keenly watched in India as H-1B visa programme that allows U.S. employers to temporarily employ foreign workers in specialty occupations, has mostly benefitted Indian citizens. As Trump takes charge as the 47th President of the United States on January 20, the question that remains is whether H-1B visa programme will undergo an overhaul and if so, how it will impact the hiring strategy of companies that employ H-1B visa holders to fill the supply gap of highly skilled labour force in the U.S.

The current verbal spat among the Trump team was not the first time H-1B visa programme came under the scrutiny in the US. In fact, during the previous Trump regime, the rejection rates for H-1B visas had gone up from an average of 4.6% prior to 2016 to 15.4% during the presidency. As a result, Indian IT services sector, which has been utilising this visa option the most, had altered their hiring strategies and increased localised on-shore hiring. In a recent investor note, broking firm Motilal Oswal stated that the hiring plans of IT services firms are now decoupled from the H-1B visa regime and the number of applications have dipped by 51% from the peak of FY17 today. However, Indian IT firms Infosys, TCS and HCL continue to be among the top 10 employers utilising this visa programme to serve their clients through Indian IT professionals. The U.S. Citizenship and Immigration Services H-1B employer database shows that Infosys with 8,140 H-1B visa approvals was the second highest in the entire list of beneficiaries till September 30, 2024.

In a reply to a Lok Sabha question in July 2024, Kirti Vardhan Singh, Minister of State, Ministry of External Affairs had stated that Prime Minister Narendra Modi, during his visit to the U.S. in June 2023 had taken up the issue of the movement of professional and skilled workers, students, investors and business travellers between India and US. “Government of India remains closely engaged with the U.S. Government on all issues relating to movement of Indian professionals including those under the H-1B visa programme through the appropriate India-US bilateral dialogue mechanism”, Singh had said.

Meanwhile, the US government’s Department of Homeland Security (DHS) has on December 17 introduced changes to the H-1B visa programme with a claim that the amended rule modernises the H-1B programme by streamlining the approvals process, increasing its flexibility to better allow employers to retain talented workers, and improving the integrity and oversight of the programme. The amended rule is set to be effective from January 17, 2025.

With Trump stating that he supports H-1B visa programme, there is no doubt about its continuity as an option before US employers to source technical expertise from other countries. What needs to be seen is whether there will be further tweaks to the new rule that comes in force days before Trump takes charge as US President.  Trump team's public spat on H-1B visa might be over, but official debate is likely to begin now.