Indian Prime Minister Narendra Modi's visit to Washington brings attention back to H-1B visas and President Trump's desire to reduce use of the program as a source of cheap labor. India is a major source of tech workers who take part in the visa program. While Trump has expressed a desire to shake up H-1Bs, the White House could use the visa program as a bartering chip in negotiations with India's government to seek benefits in defense, trade and other areas.
IBM Corp. (IBM - Get Report) , Accenture LLP (ACN - Get Report) , and outsourcing firms such as Infosys Ltd. (INFY - Get Report) , Wipro Ltd (WIT - Get Report) and Cognizant Technology Solutions Corporation (CTSH - Get Report) are large H-1B sponsors. Following Trump's inauguration, Ireland-based Accenture announced that it would hire 15,000 "highly skilled" new jobs in the U.S., recognizing the sensitivity of the issue to the new president.
"We increasingly view possible H-1B curbs as leverage for concessions from the Modi government, such as continued defense trade and cooperation and removal of restrictions on U.S. businesses," said Peter Cohn of Height Securities LLC.
Defense group Lockheed Martin Corp. (LMT - Get Report) is negotiating the sale of F-16 jet fighters to India and possilbly making some of the jet fighters in the country. Abbott Laboratories (ABT - Get Report) and Boston Scientific Corp. (BSX - Get Report) . have sought U.S. government aid in pushing back against an Indian government price cap on coronary stents.
The visas were on the agenda at the June summit of the Office of American Innovation Summit, which featured Amazon.com Inc. (AMZN - Get Report) CEO Jeff Bezos, Apple Inc. (AAPL - Get Report) CEO Tim Cook, Alphabet Inc. (GOOGL - Get Report) Executive Chairman Eric Schmidt, Adobe (ADBE - Get Report) CEO Shantanu Narayen, IBM Corp. (IBM - Get Report) CEO Ginni Rometty and Accenture LLP CEO Julie Sweet.
Bezos gave Modi a shout-out after a Sunday meeting.
Tim Cook also hailed a weekend meeting with the Indian Prime Minister.
On the campaign trail, Trump called H-1Bs a "cheap labor program" that undercut American workers.
In April, Trump aimed to curb abuse of the H-1B visa program with the "Buy American and Hire American" executive order. The Supreme Court's decision Monday to hear Trump's travel ban, and to reinstate the ban for foreigners without a "bona-fide relationship" with a U.S. university or company, heightens attention on immigration. The ban would not block someone hired by a company from entering the country, though.
Still, at the president's June meeting of the Office of American Innovation Summit, the White House seemed open minded about H-1Bs. The group discussed how the program could attract highly skilled workers without abuse by companies looking to underpay workers, according to a list of talking points. Rather than squelching the program outright, the government sought input on running it more efficiently.
President Trump may have a more nuanced position than "Candidate Trump," Height's Cohn suggested.
The administration would likely take steps such as boosting filing fees for the visas and require employers to pay the prevailing local wage for H-1B jobs, Cohn suggested. Trump might even prefer that Congress, rather than the White House, write the new rules.
"We believe legal ambiguities in immigration law have caused the Trump administration to focus more on getting the US Congress to approve changes in H-1B policy, on which we place 20% odds of happening prior to the 2018 elections," Cohn wrote.
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