Ecommerce major Amazon reacted to the move, calling it "short-sighted".
US President Donald Trump has banned Green Cards and non-immigrant visas such as H-1B till the end of 2020 in a move intended to help the US economy.
The move will impact IT firms and the technology industry in both India and the US.
Also read: What is the actual impact of Trump’s H-1B visa ban and other questions answered
Around four lakh H-1B and one lakh L-1 Indian visa-holders in the US are employed across many technology and IT firms.
The White House said the suspension of Green Cards and non-immigrant visas would help create 5.25 lakh jobs for US workers.
US-based technology giants such as Amazon, Google, Microsoft, Facebook, Apple and Intel hire a large number of staff through the H-1B visa, and have a high approval rate of 96 percent.
While the move will not affect employees with valid visas who are already in the US, it will hurt employees who have valid H-1B visas but are not currently in the US. It may also force the companies to pause recruitment of individuals who require the H-1B visa.
Google CEO Sundar Pichai expressed disappointment at the suspension of the visas.
"Immigration has contributed immensely to America's economic success, making it a global leader in tech, and also Google the company it is today,” Pichai said in a tweet.
Jessica Herrera-Flanigan, the Twitter vice-president for public policy and philanthropy, said it undermined the “greatest economic asset: its diversity".
Amazon, too, reacted to the move, calling it "short-sighted".
"Preventing high skilled professionals from entering the country and contributing to America’s economic recovery puts American’s global competitiveness at risk" the company said in a statement.
A Kotak Institutional Securities report has said that a prolonged ban of H-1B and L-1 visas will adversely impact the talent supply chain of the IT companies even if the companies boost their localisation in the US, which is more than 50 percent.
Also read: H-1B visa ban | NASSCOM urges US govt to shorten suspension of visa to 90 days
The Trump administration's move to suspend H-1B visas will hurt innovation, productivity, and job creation in the US, according to Michael Clemens, a senior fellow at the Center for Global Development and a leading migration economist said.
"H-1B visas are a major channel for the most educated and entrepreneurial people in the world to begin working and putting down roots in America," he said.
India-based software majors such as TCS, Infosys, Wipro and Cognizant, which hire several employees at their US offices through the H-1B visa, will also be adversely impacted by the ban on non-immigrant visas and green cards.
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