💵✈️Less H1-B visas and more tariffs: How Trump's policy is affecting India?
Trump’s proposed tariffs and evolving H-1B visa policies create uncertainty for Indian professionals, impacting both their career opportunities and the potential for tighter immigration regulations.
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Market Watch
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ICYMI
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🏛️ Nitish Kumar's JDU withdraws support to BJP-led government in Manipur: The political alliance shakeup has sparked a fresh wave of uncertainty in the region’s leadership.
🏳️🌈 Donald Trump reacts to Mariann Edgar Budde’s mercy appeal for queers, calls bishops’ service boring: Trump’s strong reaction challenges the call for mercy for LGBTQ+ individuals, stirring controversy.
🐄 Science-illiterate ‘Boomer Uncle’ vs. Zoho CEO on cow urine controversy: The debate over cow urine’s medicinal value continues to polarize experts and the public.
🏏 PCB breaks silence on reports of Rohit Sharma not traveling for Champions Trophy ceremony: The Pakistan Cricket Board clarifies rumors regarding Sharma's absence at the major event.
🤖 Trump announces Stargate: A $500 billion artificial intelligence initiative: The initiative aims to shape the future of AI, with a substantial financial commitment.
⚖️ Court imposes ₹1 lakh cost on ED for harassment in probe against citizens: The ruling sends a strong message against unlawful harassment during investigations.
Trump’s H1-B policy: Problems for NRIs
The H-1B visa program is a critical pathway for skilled foreign professionals to work in the United States, the program allows employers to hire foreign workers for specialized roles requiring expertise in fields such as technology, engineering, and healthcare. Each year, 85,000 new H-1B visas are issued. Indian nationals dominate the program, accounting for over 70% of H-1B visas annually, largely due to the robust presence of Indian talent in the technology sector.
Why H1-B matters to US
Trump’s Evolving Stance on H-1B Visas: Donald Trump’s approach to the H-1B visa program has undergone significant shifts over time. During his first term, his administration adopted a stringent stance, introducing policies aimed at tightening eligibility requirements and increasing scrutiny of visa applications.
Executive actions sought to protect American jobs by limiting the use of the H-1B program for roles perceived as displacing U.S. workers. Measures such as the "Buy American and Hire American" executive order in 2017 reflected this restrictive outlook.
However, Trump’s rhetoric on the H-1B program has softened during his second term. In a press conference in January 2025, he acknowledged the importance of skilled foreign professionals, stating, “I like very competent people coming into our country.”
This shift indicates a nuanced recognition of the contributions of H-1B workers, particularly in addressing skill gaps in critical industries. Despite this rhetorical support, recent policy changes and executive orders continue to pose challenges for visa holders.
Musk’s role in changing Trump’s mindset: The influence of tech leaders like Elon Musk has played a significant role in shaping Trump's evolving stance on the H-1B visa program. Musk has consistently defended the program, emphasizing its importance for attracting the global talent necessary to drive innovation and growth in the tech industry.
His vocal support, coupled with financial backing of Trump, appears to have influenced the president's perspective, particularly as tensions rise within his base over immigration policies. However, this shift has caused divisions among Trump's supporters.
Critics, including figures like Steve Bannon, argue that the influx of foreign workers under the H-1B program threatens American jobs, leading to a broader debate on immigration and labor needs.
Impact on Indian Nationals: Indian H-1B holders face growing uncertainty due to policy shifts under the Trump administration. Trump issued an executive order that eliminates birthright citizenship for children born in the U.S. to parents on temporary visas, including H-1B holders.
This policy affects their children's citizenship status starting February 20, 2025. For Indian families, this creates legal and logistical challenges, as children may lack access to benefits like education and healthcare.
All about the new order: Trump based his decision on an interpretation of the Fourteenth Amendment that critics, legal experts and civil liberties organisations claim will not hold in court. The amendment states, “All persons born or naturalised in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”
Trump, in his executive order, picked on the phrase “subject to the jurisdiction thereof” to claim that those born in the US but not subject to US jurisdiction were thus not eligible for US citizenship.
The order restricts citizenship for two specific groups of children. The first group includes those born to mothers who are unlawfully present in the U.S. at the time of birth, provided the father is neither a U.S. citizen nor a lawful permanent resident.
The second group includes children whose mothers are in the U.S. legally but temporarily, such as on work, student, or tourist visas, if the father is also not a U.S. citizen or permanent resident. In both cases, the children are deemed not subject to U.S. jurisdiction and thus ineligible for automatic citizenship.
The order has already been challenged in courts in New Hampshire and Massachusetts and will not come into effect if stayed by the courts within the next month.
The Green Card Backlog: Indian professionals face a daunting green card backlog, with over a million waiting for permanent residency, some enduring delays exceeding a decade.
This prolonged uncertainty prevents families from making long-term plans, such as purchasing homes or fully integrating into American society. Many live in a state of minimalism, avoiding major commitments due to fears of sudden deportation
The uncertainty surrounding H-1B visas has economic implications for Indian professionals. Many are hesitant to invest in the U.S. economy or pursue further education due to concerns about their future in the country. Additionally, restrictions on job portability limit their ability to seek better opportunities, affecting their career growth and financial stability.
Indians to be deported: In response to the Trump administration's crackdown on illegal immigration, India is reportedly planning to repatriate its citizens living illegally in the U.S. This move is seen as an effort to cooperate with U.S. immigration policies and could involve verifying the status of those identified for deportation.
As of late 2024, nearly 18,000 undocumented Indians are facing deportation orders. This figure includes individuals who have final orders of removal but are not currently in ICE custody. These individuals are part of a larger group of approximately 1.45 million people awaiting deportation in the U.S.
Tweet du jour
Tariffs, a major concern for India?
Donald Trump's recent comments regarding tariffs on BRICS nations, including India, indicate a potential shift in U.S.-India trade relations, carrying significant implications for both economies. Trump threatened to impose a 100% tariff on trade between the U.S. and any BRICS nations, including India, that attempt to reduce their reliance on the U.S. dollar.
He warned, “If the BRICS nations want to do that, that's okay, but we're going to put at least a 100% tariff on the business they do with the United States.”
This announcement comes at a time when the U.S.-India trade relationship has been growing, reaching approximately $120 billion in FY24. However, India’s trade surplus, particularly in sectors like IT and pharmaceuticals, makes it vulnerable to potential retaliatory measures from the U.S.
Trump’s administration is focused on strengthening American manufacturing and reducing imports, as part of his 'America First' policy. This rhetoric could lead to stricter regulations on H-1B visas, which impact Indian professionals who rely on these visas to work in the U.S.
BRICS currency: There have been ongoing discussions among BRICS nations about the possibility of establishing a common currency to facilitate trade and reduce dependence on the U.S. dollar. This initiative gained traction after the U.S. imposed sanctions on Russia following its invasion of Ukraine, highlighting vulnerabilities in relying on the dollar-dominated financial system.
On January 21, 2025, Trump reiterated his intention to impose 100% tariffs on BRICS nations (Brazil, Russia, India, China, and South Africa) if they attempt to reduce reliance on the U.S. dollar in international trade. He stated that any moves to create a new BRICS currency would be met with severe economic consequences for those nations.
In response, Indian officials have reiterated their commitment to a balanced trade relationship without abandoning the U.S. dollar. External Affairs Minister S. Jaishankar emphasized that India does not support the concept of de-dollarization and has no plans to create an alternative currency within BRICS.
Reciporcal tax: Trump has previously labeled India as the "tariff king," criticizing its high import duties on American goods. He expressed dissatisfaction with India's tariffs even after some reductions were made.
Trump has proposed introducing “reciprocal taxes”. This would mean charging other countries the same tariff rates they impose on U.S. goods. He believes this approach would lead to the elimination of tariffs and the restoration of free trade.
India's average tariff rate is 17%, similar to other major economies like South Korea and China, which counters Trump's narrative of India being a “tariff king.”
New Tariffs on other countries: Donald Trump has announced plans to impose tariffs on several countries, including Mexico, Canada, and China, with significant implications for trade.
Mexico: Starting February 1, 2025, Trump intends to impose 25% tariffs on imports from Mexico, citing concerns over undocumented migration and fentanyl trafficking.
China: A 10% tariff on Chinese imports is also set to take effect on February 1, 2025, as part of Trump’s strategy to address China's failure to curb fentanyl exports. This tariff adds to existing duties on over $300 billion in Chinese goods, escalating ongoing trade tensions.
Canada: Donald Trump's recent tariff plans have significant implications for Canada, particularly as he intends to impose a 25% tariff on imports from both Canada and Mexico starting February 1, 2025. Canada is heavily reliant on trade with the U.S., with approximately 75% of its exports directed south. The imposition of tariffs could disrupt this relationship significantly, affecting various sectors, especially automotive and energy, which are crucial for both economies.
Former Prime Minister Trudeau responded, "If the President does choose to proceed with tariffs on Canada, Canada will respond, and everything is on the table."
Hi, I’m Aniket Mishra, the editor of this newsletter. I’d love to hear some feedback on the newsletter. WhatsApp me directly and tell me what you think.