Trump versus Harris: What does it mean for Indian IT companies?

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The heated issue of immigration, particularly of skilled labour through H1-B visas, in the ongoing US presidential election may not result in a major change for information technology (IT) companies and software engineers, said legal experts.

“I would expect no significant change to visa rules if Donald Trump wins the election. Since at least 2005, no President has taken a leadership role in curbing rampant abuses of the H-1B visa program, including Donald Trump when he served as President,” Daniel Kotchen, Partner, of US-based Kotchen & Low LLP, told Moneycontrol.

Nonetheless, others say there’s likely a chance that Trump, if elected to power on November 5, might overhaul the system. However, they agree that these changes might not pose any significant impact on Indian IT companies and employees.

“Demand for these workers is very high and the current rules constrain the supply side. There is enough momentum between Democrats and Republicans to solve this issue because business people are crying that we don't have skilled resources,” US-India Strategic Partnership Forum (USISPF) president and chief executive officer Mukesh Aghi told Moneycontrol.

Recent comments from Republican candidates and Republican presidential nominee Donald Trump raised concerns about potential impacts on Indian IT workers, many of whom rely on H-1B visas.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations such as Science, Technology, Engineering, Mathematics (STEM), IT, etc. IT companies such as Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro, among others, send their employees to the US on these visas.

Most Indian IT services companies heavily rely on the US for their business, accounting for over 50 percent of their revenues. They use this specialised work visa to deploy their employees at the required client locations in the US.

The fact that around 85,000 H-1B visas are allotted every year to skilled professionals, is the reason why there’s chatter amongst the tech circle on how the speeches would eventually culminate. About 65,000 H-1B visas are allotted to skilled labour, with an additional 20,000 visas offered to professionals who earn a master’s degree or a doctorate from a US institution.

A majority of these visa applications come from Indian and Chinese professionals, with ultimately 70-75 percent of these getting allocated to Indians given the sheer volume of applications received from the country.

Also read: H-1B visa overhaul likely if Trump wins, no impact on Indian IT workers: Mukesh Aghi

A recent Wall Street Journal report revealed plans for a future Homeland Security Secretary to sign an order restricting legal immigration pathways, based on interviews with former Trump officials and campaign-aligned groups. Key advisers, including Stephen Miller and the America First Policy Institute, are reportedly preparing related executive orders, regulations, and memos.

“If either of them comes into power, there will be changes expected. Though Kamala Harris won’t mess with H-1B visas too much,” said Poorvi Chothani, founder and managing partner at immigration law firm LawQuest.

The shortcomings

There are plenty of shortcomings in the present H1-B visa rules including a lottery-based system and multiple applications for the same candidate, as highlighted by experts.

Kotchen said the most significant shortcoming of the present rules and practices is the near-complete failure of the US government to enforce existing H-1B laws. He argues that new laws aren’t needed to curb much of the abuse in the H-1B program; better enforcement of existing laws would be enough.

“IT staffing companies routinely apply for H-1B visas against jobs that do not exist at the time of the visa application, which is illegal. The federal government could stop these practices simply by enforcing H-1B laws. But the government has elected to turn a blind eye to the rampant corruption that now defines the industry,” Kotchen added.

Experts say there’s a growing view in the US that the federal government often prioritises corporate interest over public interest.

“In the IT staffing industry, companies have increased profits by allowing the H-1B visa program to be used as a vehicle to source vulnerable, indentured, and underpaid H-1B employees who then replace Americans from jobs,” Kotchen said.

In a recent event, US entrepreneur Vivek Ramaswamy, who initially sought the Republican presidential nomination but withdrew to support former President Trump, questioned the “broken” system of H1-B visas.

He went on to say that direct Silicon Valley lobbying meant an employee would be “a slave” to the hiring company and couldn't switch to a different company.

“When it's lasted that long, you need to shut it down, start with a blank slate, and rebuild from scratch.”

Also read: Trump or Harris: Stock market's reaction to the US election outcome may differ

Merit-based system

Experts also agree that it is likely that a merit based immigration system will surely pave the path for candidates with skills and qualifications rather than country of origin.

“For the employees, it is a win-win in case the new rules are enacted, which will consider qualification and skill over the lottery system, quicker migration to the US, fair wages as well as reduced restrictions on work authorisation for dependants on H4 visas,” N. Anand Mohan Murthy, Partner, at corporate law firm KSK, said.

H-4 visa is a nonimmigrant visa that allows the spouse and unmarried children of certain nonimmigrant workers to live in the US.

Meanwhile, experts believe that the number of visa allocations will not be tampered with, since only one in 9 cases get selected. “I believe H-1B visas should be mainly merit based. There needs to be more openings for college graduates from the US,” said Chothani.

Ramaswamy, during the event, had said, “Why the heck do we do it on the basis of a lottery, when you could actually just select the very best people.”

The precedents

Trump’s track record on immigration complicates matters.

While there’s noise around clamping down on ineffective laws, one of Trump’s companies had reportedly applied for an H1-B visa for an employee back in 2022. While Trump’s company denied the report saying it was terminated, government records say otherwise, according to a report by AP.

In 2020, when Trump was the President, the US labour department issued a rule raising the minimum wage of an H1-B visa holder to that of any other US worker. Although the rule was blocked on procedural grounds, it alarmed employers.

“Major corporations profit off the abuse of the H-1B visa program, and President Trump, like other US presidents, has demonstrated a lack of will to stand up to corporate benefactors,” Kotchen said.

Aghi of USISPF said that while both Republicans and Democrats previously collaborated on a robust legal immigration bill, Trump ultimately blocked it, keeping immigration as a political issue for elections. However, momentum remains to improve H-1B policies, especially as both parties recognise the need for skilled workers.

“Hopefully, whoever comes in, this (new rules and policies for H1-B visas) will go to the Congress. At least that can be enacted,” Aghi said.