Could the suspension of 'premium processing' of H-1Bs be the first nail in the coffin for Indian IT?

If so, it could jeopardise a $150 billion industry that gets around $60 billion of its billings from the US.

While some of India's top dignitaries were visiting with Washington last week to try and make a case for Indian IT's future in the US, the final touches of the Trump administration's first initiative against the H-1B skilled foreign worker's visa were put into place. Many are calling this an exceedingly ominous harbinger of what is to come in the coming months.

In Washington, Indian Foreign Secretary S Jaishankar and Commerce Secretary Rita Teaotia were thick in the midst of a three-day visit that attempted to convince Donald Trump's cabinet officials and other Congressional leaders to look at the H1-B visa issue as a trade and services issue rather than a contentious immigration one.


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"Overall, our sense was this administration has a positive view of the relationship and of India. We saw a lot of goodwill ... lot of interest in taking it forward," said Jaishankar of the meeting with the US Secretary of State Rex Tillerson, Commerce Secretary Wilbur Ross, and Homeland Secretary John Kelly.

Others may not buy into that rosy depiction of how things went down, especially considering the subsequent first salvo of many expected to be many fired against Indian IT firms who have been utilizing the H-1B visa to send their temporary workforce to US-based client sites. Critics of Indian IT firms say that these companies, along with their US clients, have gamed the H-1B lottery system to obtain visas for jobs that should have gone to American tech workers.

On Friday last week, the US announced it was temporarily suspending the expedited premium processing of H-1B visas from April 3 onwards for a period of six months. Prior to this, firms seeking to send employees on "urgent" projects could have paid the $1,225 premium to the regular fees in order to have the application processed within 15 days instead of the regular three-to-six-month duration.

The announcement shouldn't come as a surprise to those who recall President Trump's statements while on the stump when he expressed outrage at companies such as Disney who were accused of replacing their in-house IT workers with those from Indian IT firm Cognizant. Trump has often said in the past that he wants to bring in the "best and brightest" and refashion the immigration system into a more merit-based one.


For H-1B aspirants who are already in the US on another visa but desire a H-1B, the premium visa is the go-to one. Some use it as an alternative process if they don't happen to make it to the annual H-1B lottery.

The problem with the H-1B is that there's been a huge backlog in the number of applications filed in the regular category, which has a six-to-eight-month wait to find out if you've received it or not. Filing an extension -- in past years, there have also been petitions for one-year visas that have required renewals -- or amendments due to location changes of visa holders have added to this growing heap. Therefore, a processing time of a scant 15 days, which is what the premium category commands, is simply too tempting to avoid for large companies for whom the extra fee of $1,225 is a pittance.

So, while the general category itself is creaking under an enormous backlog, the recent, unprecedented filings in the premium category has also become an administrative headache. Many of these filings have been in reaction to the string of anti-immigration policies the Trump administration put into effect this year and a general sense of great uncertainty over what will happen to the regular H-1B visa in the next year. Get it while it's there seems to be the prevailing wisdom.


Some people like TV Mohandas Pai, ex-CFO and board member of IT pioneer Infosys, didn't think that this would have much of an impact and that the service would resume after a few months. "This is a common thing and has happened before also. Applications for new visas though premium category usually submitted before April and the petitions sent after that are mostly for renewal," said Pai in Business Standard. This is true, but Pai's optimism, and the prospects for Indian IT, will be dismally different if the category is suspended for the six-month period, as CSIS has declared to be the case on its website.

As it stands, the decision will impact Indian IT significantly when it comes to flexibility in adding personnel on projects in the US at a moment's notice. They will now be relegated to a minimum three-month wait in the regular category instead of a handful of weeks. "The US government is clearly telling companies to not depend on the H-1B visa going forward," Kris Lakshmikanth, chairman of Head Hunters India, a boutique executive search firm that works with several Indian IT companies, said in Quartz.

For an industry that generates some $60 billion in foreign exchange from work done in the US alone, this could be very bad news indeed. For American tech workers convinced that Indian H-1Bs are the reason for their underemployment, this is something that they hope will be just the first in a string of much-anticipated decisions in their favour.