Report says US considering capping H-1B visas over data localization, Washington denies 

New Delhi: The United States has reportedly told India that it may cap the number of H-1B work visas for nations that force foreign companies to store data locally. This media report comes in the backdrop of the deteriorating row between the two countries over tariffs and trade. India recently imposed higher tariffs on some US goods, days after Washington withdrew a preferential trade privilege for New Delhi.

The H-1B visa allows skilled foreign workers to work in the US. Indians are the largest foreign group to receive the H-1B visa. About 85,000 such visas are issued to foreign skilled workers every year and Indians receive almost 70 per cent of them.

Interestingly, the threat to cap H-1B visas comes days ahead of US secretary of state Mike Pompeo’s New Delhi visit.

India has stringent new rules that require banks and credit-card companies to store the data of domestic customers locally. This has upset companies like Mastercard, which were given an ultimatum to store Indian customers’ data within India. This has apparently not gone down well with Washington.

“Data localization” curbs the powers of the multinational behemonths and US multinationals have lobbied hard against this around the world.

According to media reports, on Wednesday, two senior Indian government officials said they were briefed last week on the US plan to cap H-1B visas issued each year to Indians at between 10 per cent and 15 per cent of the annual quota. The officials said India’s push for “data localization” was the reason behind it.

It is not just India who is pushing for “data localization”. An increasing number of countries around the world, especially in Asia are making laws that make it mandatory for foreign companies operating in their land to store data locally.

The Indian government, however, said they have received no official communication from the US on this. Raveesh Kumar, the spokesman for the ministry of external affairs, said, “We have not heard anything officially from the US government (on H-1B visa cap and its linking to data localization).” 

US denies linking H-1B to data localization

Responding to a media report over US considering capping H-1Bs at 10–15 per cent of all H-1Bs for countries that had a data localization policy, the US state department said it is not considering caps on H-1Bs work visas for nations that force foreign companies to store data locally.

A state department spokesperson said, “This review is not targeted at a specific country and is completely separate from our ongoing discussions with India about the importance of ensuring the free flow of data across borders.”

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