According to a Barclays research report, the effect of US restrictions on H-1B visas on remittances from Indians living abroad would be within $5 billion.
In addition, the report stated that rather than hindering services exports, the growing trend of global capability centers (GCCs), which include many US-based companies, is here to stay and will only get stronger in the wake of the anticipated H-1B reform.
Key Highlights
- Barclays projects U.S. H-1B restrictions may reduce remittance inflows to India by under $5 billion.
- Despite visa tightening, Global Capability Centers could sustain service exports, limiting remittance impact.
A one-time $100,000 fee for new H-1B visas and a wage-based selection process, which replaces the current lottery-based selection system and gives higher-skilled and higher-paid applicants multiple entries in the selection pool, are the two changes that US President Donald Trump announced earlier this month.
"It is impossible to discount the impact of these new regulations on the probable loss of jobs and dependent livelihoods, but the effect through remittance is unlikely to exceed $5 billion (out of a total of $83 billion)." We anticipate some redistribution of movement over the medium term, as other nations (Canada, Germany) have already begun expressing interest in luring highly skilled Indian talent," Barclays stated.
Also Read: Trump's H-1B Visa Fee Hike Hits India's IT Sector and Job Market
Although 62% of India's exports of IT and IT-enabled services go to the US, US-based jobs have not been the main driver of industry growth.
