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Why America’s H-1B visa loss could be India’s gain

Audience members wave Indian flags and hold balloons during an event with India's Prime Minister Modi at Madison Square Garden in New York
Reuters/Lucas Jackson
Which is the land of dreams?
  • Ananya Bhattacharya
By Ananya Bhattacharya

Tech reporter

Published Last updated

The Trump administration’s four-year campaign against the H-1B visa, designed for workers with special skills, has undermined foreign nationals’ sense of security and hurt the US economy. But America’s loss could be India’s gain.

Highly skilled, young workers from India—the biggest group of H-1B recipients—are abandoning the American dream and moving home. The technical jobs they held in the US may follow them.

Since taking office, the Trump administration has made a barrage of changes to the requirements, qualifications, and processes required to secure new H-1B visas or extend current ones.

“These regulations likely preclude the ability of foreign nationals to put down roots and build a life and a family in the US,” said Richard Burke, CEO at immigration forum Envoy Global. “It’s completely understandable that many Indian nationals are considering alternatives to the US.”

Already, the number of US-based Indians seeking jobs back home grew more than 10-fold between December 2016 and March 2017. More than 5,000 seasoned, tech-savvy professionals have repatriated to India from the US in the last couple of years.

With more restrictive policies in place, the jobs H-1B holders now have will ship out to where the talent is. “If US firms can’t bring Indian workers to Silicon Valley, they would just outsource production to where the Indian workers are,” said Gaurav Khanna, assistant professor at University of California San Diego’s School of Global Policy and Strategy. “This means US production would fall, and India’s production would rise.”

In the event of a migratory reversal, India can only stand to gain. But how much India gains will depend on how well it can accommodate the influx of returning professionals.

Trading the American dream in for an Indian one

Both future and current H-1B workers are exhausted with the H-1B policy swings.

Be it the students dealing with curbs on how long they can study in the US and a tough job market, or the unending wait for green card aspirants, lots of Indian immigrants are second-guessing the price they pay to build their lives in America.

“These regulations likely preclude the ability of foreign nationals to put down roots and build a life and a family in the US.”

Life on the H-1B comes with chains. Workers are tied to their employer because quitting carries the threat of deportation and switching jobs can be troublesome. Additionally, workers cannot receive income from anyone but their direct employer. Then there’s the added headache of securing family and spousal visas, only for them to not be allowed to work. And even for Indians in line for green cards, the path to immigration stretches up to a whopping 195 years. Some of them, even after waiting a whole decade, are looking to relocate.

In light of all these shortcomings, India is becoming an enticing option. These barriers don’t exist there. And people can be closer to their families.

“Over the past decade my firm has helped many hundreds of Indian families and businesses move to the US, but the tables are slowly starting to turn,” said Mark Davies, Global Chairman at Davies & Associates.  “Now, clients from all around the world are asking how we can help them to reach India as well.”

The earlier perception around the H-1B visa was that it gave better access to prestigious companies and high-quality work.

“Much of that has changed,” said Vikram Ahuja, co-founder of job search platform Talent500 by ANSR. “Today, Indian engineers can work for top companies and perform equally, if not better, in India.”

American jobs in India

Tightening H-1B policies, such as rising denial rates, resulted in major companies increasing hiring at foreign affiliates in India and China, and even opening new foreign affiliates, according to a July 2020 research paper by Britta Glennon, assistant professor of management at the Wharton School of Business at University of Pennsylvania.

Partly as a result, many global companies are already locating critical, innovative projects in India. Google has taken an India-first approach with everything from operating systems to language additions to modifying maps with local nuances. Uber’s India team has emerged as its innovation backbone. Its global fintech team is based out of Hyderabad.

Experts expect that international companies will only continue to set up shop in India. Because of Covid-19, “most companies have become more comfortable with remote work—whether within their company’s region or globally,” Envoy’s Burke said.

Of the 4 million employees in India’s IT sector, approximately 40% currently work at global capability centers run by renowned multinationals, according to Talent500. This figure will increase by 10-15% year-on-year while the overall industry grows at a pace of 6-8%, Ahuja estimates.

Moreover, India’s startup scene is thriving.

Indian jobs on offer

India is no longer the land of run-of-the-mill IT jobs. Its startup ecosystem is currently the world’s third largest (pdf) and the country is home to 24 unicorns—private startups valued at over $1 billion.

Many US-educated youth have already been tapping into the massive opportunity.

For instance, Parag Agarwal, a 2015 graduate from New York University’s Stern School of Business, did not even try for the H-1B because smaller startups—the kind of organization he wanted to be part of—rarely sponsor the work visa since it’s a time-consuming and expensive affair. Instead, Agarwal joined Pune-based e-commerce startup RainCan, which sold fresh milk and dairy products, as vice president of marketing. In October 2018, BigBasket acquired RainCan, and Agarwal is now the online grocer’s city business head in Ahmedabad, Gujarat.

With visa scrutiny and denials rising after Trump took office in 2017, scores of H-1B lottery rejects returned home and set up their own ventures or joined others. As Trump’s clampdown becomes harsher, that will likely become even more common.

India’s entrepreneurs believe the returning H-1B talent could come home and catalyze the next wave of innovation, and some are actively encouraging H-1B holders to return.

The Indian startup sector’s shortcomings

Yet despite all the troubles in America, for many Indians, India still remains an inferior option. Indian-born workers come to the US to get a world-class education and an unparalleled opportunity to network, UCSD’s Khanna said. In contrast, India’s nascent startup is more fractured and often runs on jugaad, a Hindi term for makeshift innovations using scarce resources.

Looking for funding can become an exercise in pedigree-driven flattery, because bigwigs from abroad are hard to approach, and the local venture capital industry is still small. A talent crisis also plagues the industry. Although India churns out millions of engineers each year, they’re mostly subpar because the quality of education is subpar.

Moreover, Silicon Valley veterans hired at big-name startups like Flipkart (now owned by Walmart) and Zomato have experienced burnout because of long commutes in traffic and a lack of work-life balance.

Instead, many Indians would rather migrate to, say, Canada. Owing to its friendlier immigration policies, over 40% of Canada’s tech roles today are held by immigrants, and a host of startups in upcoming sectors like AI, the Internet of Things, and cryptocurrency are already well-established and hiring there.

Canada-based techies are paid less than their US counterparts—the average engineer fetched around $74,000 a year in Toronto versus $134,000 in San Francisco, according to a 2017 survey—but it’s still a much more attractive paycheck than one would get in India, where the best paid tech jobs are around the $35,000 mark.

There are still many kinks to iron out to lure H-1B holders back home—and make them stay.

“The industry has to become attractive by itself,” Akash Gehani, co-founder and chief operating officer of Instamojo, told online business publication YourStory. “And that means having a better ecosystem, products, and a big market here.”

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