How H-1B visas are crucial for Indian professionals and economy

Mumbai: We all know of someone whose child went to the US for a job requiring specialized skills, such as engineering, and then started sending money home. This not only enhanced the family’s economic but also social status.

However, the visa that enables this – H-1B – has also been criticized as a facilitator of brain drain. India spends huge amounts on educating engineers and other skilled professionals. Families, meanwhile, spend a small fortune on private tutoring, college fees, and related expenses. Once that’s done, the ‘magic visa’ is within reach and many of these professionals move to the US, helping it's economy more than ours.

Despite so much riding for so many people on this movement of skills, few fully understand the H-1B visa programme that has recently been at the center of much debate in the US.

During the Presidential campaign, it took fire for undercutting American workers but was also praised for attracting much-needed talent. Donald Trump, once an opponent of the program that brings skilled foreign workers to the US, now supports it. Ironically, it was the first Trump administration that tightened the screws on H-1B visas, increasing denial rates and slowing processing times. Rejection rates skyrocketed to 24% in 2018, compared to 5% to 8% under Barack Obama.

Even today, many believe H-1B is flawed, citing fraud and abuse – especially by Indian IT firms. Its opponents have said that Americans in the IT industry are being laid off and replaced by cheaper H-1B holders.

It was amid much cheering that Trump launched a crusade as part of his second Presidential campaign to ensure that American jobs stay with Americans. However, ‘First Friend’ Elon Musk, who needs H-1B to secure top engineering talent for his companies Tesla and SpaceX, and entrepreneur Vivek Ramaswamy supported the visas. This prompted the Trump turnaround.

As things stand, some in the Trump administration want to preserve H-1B visas, while others want to restrict all immigration.

So, what exactly is this visa program that now finds itself at the center of a storm over immigration, the central focus of Trump’s four-year agenda? It’s a temporary work visa that allows firms to hire foreign professionals with specialized skills in fields such as IT, engineering, and medicine. It is initially granted for three years and can be extended for a maximum of three more. It is seen as a stepping stone towards a Green Card – permanent residency. This makes H-1B one of the most sought-after work permits by Indians.

For workers, it mandates equal pay and comparable working conditions to those of their American counterparts. For employers, it provides access to a global talent pool.

So, every year, thousands of Indian techies move to the US with H-1B visas. In FY 2023, the Office of Homeland Security Statistics said 755,020 people were admitted to the US on H-1B status. The US Citizenship and Immigration Services said Indians received the highest number of these visas, 72.3%, issued in FY 2023.

While we all understand the role the visa plays in ensuring the US’ global technological superiority and also in its economy, here’s something to think about: what if there was no H-1B?

First, let’s look at the impact on the USA

Foreign professional workers fill a critical vacuum in its labor market. US companies compete for skilled foreign professionals in the pool of H-1B visa numbers. Demand for visa numbers has outstripped supply consistently and the cap is usually reached before the year ends.

Among those that use the program are global technology giants such as Google, Microsoft, Amazon, Apple, and Meta.

Economists point out that immigrant workers create job opportunities for native workers in several ways. Immigrants and natives often have different skills, so they complement each other. That is why unemployment numbers tend to be lower in fields that employ large numbers of H-1B workers. This has been underscored by various studies over the years.

Immigrant workers spend and invest their salaries in the US, which boosts the economy and creates jobs. With foreign talent on hand, US businesses tend to expand within the country rather than look overseas. A study found that restrictions on H-1B visas force US corporations to reduce the number of jobs at home and shift them to foreign affiliates.

Often, the immigrants create new businesses, thus expanding the economy and the labor market. The US’ business- and innovation-friendly environment, ensures that immigrants’ inventions and ideas mushroom there. A 2019 study showed that higher rates of successful H-1B applications correlated with a rise in the number of patents filed and patent citations. Such startups were better suited to secure venture capital funding and list successfully on stock exchanges.

Between FY 2010 and FY 2019, eight US companies that would go on to be part of the COVID-19 development —Gilead Sciences, Moderna Therapeutics, GlaxoSmithKline, Inovio, Johnson & Johnson Pharmaceuticals, Regeneron, Vir Therapeutics, and Sanofi—received H-1B approvals for 3,310 biochemists, biophysicists, chemists and other scientists. Many of the doctors on the frontlines of the pandemic were in the US on this visa.

Lastly, data also shows that H-1B workers don’t drag down the wages of native workers.

USA is a source of employment for Indian professionals

For India, the benefits are critical. Not only is the US a source of employment for our professionals, but it is also the largest source of remittances to India. In 2023, India received $120 billion in foreign remittances, with the US leading the list of source nations.

Techies who have moved to the US have done very well and many have either returned to start businesses in India or have invested in startups here. They are a powerful voice for India in the US and do much for India’s international standing. Many have gone on to lead global corporations.

The movement of skilled professionals has a bearing on our relations with the US too. The Ministry of External Affairs pointed this out as the debate over H-1B visas intensified. Our economic ties benefit from the expertise of such skilled professionals; both countries leverage their strengths and competitive value, as the ministry said.

Indians, of course, have a long relationship with H-1B visas. It is why Indian-Americans are now the most educated and highest-earning immigrant group in the US. The biggest draw is the opportunity to make more money than the individual can in India. For many, this is life-altering.

As things stand, more than a million Indians, including dependents, are waiting in employment-based Green Card categories. But that can mean a wait of more than 20 years sometimes. It’s the employer that must sponsor the candidate, who thus cannot leave the job. If the candidate loses the job, they have only 60 days to find a new one.

This may be why the program has been linked to immigration. While H-1B is a worker mobility visa, it gets clubbed with immigration and then a target of those who believe these jobs should go to Americans. The fear is that anger over H-1B visas could spark resentment and even violence against Indians living in the US.

It’s worth noting that it’s not a one-way street – Indian technology companies have hired nearly 600,000 Americans and spent more than a billion dollars on upskilling three million students across 130 US colleges. Many Indian technology companies in the US prioritize hiring native professionals rather than bringing Indians over.

Despite the turbulence over H-1B, it remains a magnet for Indians. And that’s unlikely to change in the foreseeable future.

(Ashraf Engineer has been a journalist for almost three decades, leading newsrooms and initiatives across print, digital, and audio. He is the founder of the All Indians Matter platform, a home for conversations with and about India on issues that matter, and the host of the podcast by the same name.)