Trump's crackdown on skilled immigrant visas has dealt another blow to the already fragile U.S.-India relationship, with trade talks facing more obstacles. The Trump administration requires new H-1B visa applications to be paid $100,000. This move will mainly affect Indian applicants because more than 70% of H-1B visa holders in the past were Indians. The move has shaken India's $280 billion technology services industry and threatened its outsourcing business model, putting thousands of jobs at risk.
In August this year, Trump imposed a 50% tariff on India's exports to the United States on the grounds that India imported crude oil from Russia, breaking decades of U.S.-India diplomatic tradition. Last week, trade talks were restarted, and Trump personally called Modi to congratulate him on his birthday. Tensions seemed to be easing. However, the sudden new visa regulations have once again put a question mark on the prospects of this "thaw".
"This is the final fatal blow to U.S.-India relations," said Biswajit Dhar, a professor at the Council for Development Studies headquartered in New Delhi. "The $100,000 fee is equivalent to a non-tariff barrier in the service industry. The goal is to crowd out Indian professionals and cause a heavy blow to bilateral relations."
Indian Commerce Minister Piyush Goyal is leaving for the United States for trade negotiations, and Foreign Minister Jaishankar will also meet with US Secretary of State Rubio in New York. The visa issue is expected to be the focus of the talks.
Sonal Varma, an economist at Nomura Holdings in Singapore, pointed out that the US-India strategic cooperation in recent years has not brought any substantive concessions to New Delhi, and trade negotiations have become increasingly constrained by geopolitical factors, making it more difficult to resolve frictions.
Economists had warned that the visa reform could reduce remittance inflows into India and weaken the rupee. India is one of the largest source countries of immigrants to the United States, accounting for about 1% of the U.S. population. According to Citigroup data, these highly skilled workers remit nearly $35 billion to the country every year.
Although India is the fastest-growing large economy in the world, its growth rate is still not enough to create enough jobs for its 1.4 billion people. According to Center for Monitoring Indian Economy Ltd. According to the data, the youth unemployment rate remains high, close to 40%. The information technology services industry remains a key employer, with approximately 125,000 new jobs created last year and nearly 6 million people directly employed in the industry.
India's opposition has criticized Modi's relationship with Trump, saying the prime minister has failed to take a tougher stance in the face of U.S. pressure. The Communist Party of India said that the US actions constituted "bullying". Congress leader Rahul Gandhi said Modi's silence "exposed him as a weak prime minister."