Trump's Visa Tweak: Impact May Be Felt On Remittances, Realty In India
In a bid to attain the objectives of ‘Buy American, Hire American’, President of the United States Donald Trump is considering to do away with the startup visa and work permits for the spouses of H-1B visa holders. The Trump administration is planning to revoke the policy that would affect at least 70,000 spouses of Indian workers, who won’t be able to seek employment or set up their own businesses thereafter. Also, entrepreneurs seeking to nurture their startup will no longer be able to apply for parole (it means a stay in the US).
At present, spouses of H-1B visa holders get an H-4 visa and can apply for an Employment Authorisation Document (EAD) that gives them the right to work in the US, obtain social security number, open a bank account and apply for driving licence.
Currently, a foreign worker having an H-1B visa can remain in the US for up to six years. Also, a person having a pending permanent residency application gets an indefinite extension of the H-1B visa until the applicant's Green Card processing is completed. But according to the proposed rules, a foreign worker will have to exit the country until the processing of the Green Card application is complete.
Earlier, in February, the US tightened the H-1B visa rules due to which immigration experts are expecting sharp decline in the number of visa petitions to be filed by Indian IT service companies.
According to the new rules:
- Companies will now have to show evidence of third-party contracts which was earlier required only when requested.
- Companies need to provide exact dates and employment places.
- There will be scrutiny on the extension of H-1B visas beyond three years.
- It is possible that the H-1B visa will be valid only till the period of the specific project. If the project gets completed or abandoned and the professional is benched, the continued stay for three-year term may be disallowed.
- Applicants will have to show evidence of actual work assignments
- Information such as a detailed description of the specialised duties the beneficiary will perform, the qualifications required to perform those duties, the duration of the job, salary or wages paid, hours worked, benefits, a detailed description of who will supervise the beneficiary and the beneficiary’s duties, and any other related evidence will have to be produced before the authority.
Scott FitzGerald, partner in US immigration firm Fragomen Worldwide, said that filings of H-1B petitions by Indian IT services companies would be down this year, by as much as 50 per cent compared to the recent years. At the same time, visa rejection rates including renewals are expected to go up. Also, there is a 40 per cent increase in those visa petitions that received requests for producing additional evidence.
According to the National Foundation for American Policy, the top seven Indian-based companies received only 8,468 approved H-1B petitions for initial employment in FY 2017, a decline of 43 percent for these companies since FY 2015, when it received 14,792 H-1B visas.
Impact on India
The US has been one of the major sources of remittances to India, accounting to $10 billion in 2016. In its latest report, the World Bank has reiterated this fact along with the revelation that India is the highest remittance receiver in 2017. With tightening of visa rules and scrapping work permits for the spouses, the investment will go down as the income would drop subsequently. There are currently around five lakh H-1B visa holder in the US of Indian origin who will be directly affected by this new ruling.
As of June 2017, the US Citizenship and Immigration Services had granted around 71,000 EAD to H-4 spouses. Of those, 94 per cent were women, and the vast majority, 93 per cent, were from India
Apart from this, the Indian real estate market has been one of the major investment channels for US-based NRIs who plan to move back to India in future. The move from the Trump administration would come as a major jolt for various property markets across India as the financial flow is likely to decline in times to come.