They are discussing H-1B; should you feel worried about it?

They are discussing H-1B; should you feel worried about it?

Monday May 23, 2016,

6 min Read

During the 80s, for the first time in its history, Silicon Valley witnessed the emergence of the immigrant Indian techies. The likes of Vinod Dham, Father of the Pentium chip; Kanwal Rekhi, Founder of Excelan, and Vinod Khosla, Founder of Sun Microsystems, introduced a new image of India, which went beyond that of the country being a land of snake charmers and elephants. Since then, Indians have not looked back.


Sundar Pichai, Satya Nadella, Shantanu Nareayen of Adobe, Padmasree Warrior, and Sabeer Bhatia of Hotmail are just a few names in the never-ending list of techies from the Valley. They left in their wake a string of impressive successors, and the Americans sat up and took notice.

It’s important to note that the reason behind the Indian techies’ success was the liberal immigration policy of the US. It made it possible for hordes of graduates from India’s prestigious Indian Institutes of Technology to move to Silicon Valley and make a name for themselves.

According to a 2014 study by Professor Vivek Wadhwa, the number of Indian-Americans in the US tech world appears to be at its peak, with as many as 15 percent of startups in Silicon Valley being founded by Indians.

The report points out that Indians constituted the greatest number of immigrant tech-company founders, having founded more startups than the next four groups (from Britain, China, Taiwan, and Japan) combined. The proportion of Indian-founded startups in Silicon Valley has increased from seven percent to 15.5 percent from 1999 to 2012 even though Indians make up just six percent of the Valley’s working population.

However, things are changing now. The American election has charged the atmosphere the world over. Many countries have reacted differently to the political rhetoric during the US election campaigns.

Things were fine for Indians till one of the front-runners for the presidential election (Donald Trump) blurted out 'H-1B visa'. It caught everybody's attention here as thousands of Indians (especially techies) bank on the visa to work in the US.

The full picture

Since last year, when leaders announced their candidacy for the presidency, the race to the position has narrowed down to top three leaders — Donald Trump, Hillary Clinton and Bernie Sanders. The top two, a Republican and Democrat respectively, are the biggest contenders in the race now.

Trump and Hillary are fighting the election tooth and nail. In a race to the White House, both candidates are making promises to do everything to make America great again; and unemployment is the key issue in this direction.

Last year, Ted Cruz, a contender for the Republican presidential nomination, had announced to bring down the number of H-1B visas from the current 85,000 to 70,000 a year.

This year, during his presidential campaign, Donald Trump said the H1-B visa programme that allows US employers to employ foreign workers in specialty occupations for a period of time should be ended.

Reactions from Delhi

“My concern is that Donald Trump in last debate, said H-1B, whatever it is, I use it but I don’t like it. I want to scrap all H-1B. That’s very worrying for export-led growth going forward,” Chief Economic Adviser Arvind Subramanian said recently at the Advancing Asia Conference co-hosted by India and IMF.

Subramanian said services-led export model can push India to achieve eight-10 per cent sustained growth but talk on H-1B scrapping was worrying.

Congress tightens access to H-1B

It’s not just a political rhetoric by a politician, but the US Congress has already taken a step in this regard.

Late last year, the US Congress passed a bill that increased the amount businesses must pay to secure an H-1B or L-1 visa. The US doubled the fee for H-1B visas for every new applicant to $4,000 from $2,000, and $4,500 for every L-1 visa, which is needed for intra-company transfers, from $2,250.

Also Read: Business lessons from the man of the moment – Donald Trump

Indian firms such as Infosys, Wipro, Cognizant, and Tata Consultancy Services rely heavily on H-1B visas to allow Indian staff to fly to the US when they are needed to work on projects in the US as part of their “global service delivery” model.

These changes will be in force for the next 10 years, and are likely to cost the Indian IT industry an estimated $400 million a year, according to NASSCOM.

“In the past few years, with reduction in the number of H-1B visa and fee hike, the US has already tightened the screw. This has surely put more roadblocks on the way to secure the visa,” says Jaideep Singh, Partner at Clearstone Venture Partners, a Silicon Valley fund. He was focused on incubating and investing in numerous early stage startups.

He is also the Founder and Director of seeDoc, an online medical consultation company. In the consumer internet space, Jaideep was the Founder and CEO of Spock, a people search engine with over 30 million monthly visitors in two years of its launch.

“There are thousands of techies who want to go to Silicon Valley or other places in the US to seek jobs as well as receiving the international exposure in a country where the entire techie world meets. Such strict action will surely shatter many dreams in India,” says Peesh Chopra, Managing Partner, Peesh Venture.

He adds that if ever the visa is completely curbed by any president, it will be a big loss for both the countries.

Nothing more than election rhetoric

While there are jitters in the techie camp owing to continuous efforts to tighten the visa, many feel that such election promises by politicians is just an election rhetoric and a gimmick to garner votes.

“Donald Trump says something one day and the exact opposite another day. The eventuality of his being President and then actually doing something about it will be an interesting thing to see,” says Kashyap Deorah, Founder of Hypertrack and author of The Golden Tap.

Commenting on the subject, Dheeraj Jain, Partner at Redcliffe Capital, says that Donald Trump, who has been threatening to end H-1B, has flip-flopped over the entire issue of giving access to foreigners in America. He has not been consistent with anything he has said so far.

“The fee hike or cut in the H-1B is the US lobby and has nothing to do with just Trump. However, there is a huge dearth of techie talent in America and the country alone can’t fix it. It needs people from outside to fill those vacant positions. As far as I see, irrespective of many lobbies and election rhetoric, the US can’t shut down H-1B completely,” concludes Dheeraj.