Billionaire entrepreneur and Tesla CEO Elon Musk stirred a hornets’ nest by slamming supporters of US President-elect Donald Trump on H1 B Visa and declaring that he would go to a “war” to defend it. Considered to be the most vocal Trump ally, he later watered down the criticism and suggested that it should be made more expensive to encourage the domestic hiring.

What Is H1 B Visa?

H1 B Visa is the visa that is issued by the US government under section 101(a)(15)(H) of the Immigration and Nationality Act.

It allows US companies to employ foreign workers in “specialty occupations.”

The “special occupation” includes biotechnology, chemistry, computing, architecture, engineering, statistics, physical sciences, journalism, doctors, dentists, nurses, physiotherapists. Those with skills of technical writing, theology, and the arts, may also apply for this visa.

The H1 B Visa is issued for a period of three years and it can be extended up to six years.

It can be issued for a maximum period of ten years for those working for exceptional US Department of Defense project related work.

The person seeking this visa must have specialized knowledge, a bachelor’s degree and equivalent work experience.

The H-1B Visa is expensive as the employer must pay $9,500 per application. It limits the kind of roles that are available to eligible candidates.

A start-up founder cannot apply for this visa, neither he can hold a controlling stake in a company.

A H1 B Visa holder must leave the US within 60 days of layoff even if he is employed for several years. The layoff can happen anytime without any notice and the employer can be sacked at any time.

Outburst Against H1 B Visa

There is a strong lobby against this visa, a bigger part of the lobby is made of workers and sympathisers of the Republicans and particularly Donald Trump.

They argue that it is against the spirit of “America First”, which advocates to make opportunities for the US firms and its citizens.

This lobby became active after Donald Trump appointed Chennai-born born Sriram Krishnan as Senior White House Policy Advisor on AI.

Far-right activist Laura Loomer slammed Elon Musk, called him “welfare queen” and accused him of “cozying up with Iran and China”. The fierce nationalist also accused the SpaceX CEO of prioritising his personal profit over national interest.

Earlier, she had claimed that H-1B workers were taking jobs from qualified Americans, opposing the “America First” agenda of the incoming Republican administration.

Donald Trump, Elon Musk Bat For H1 B Visa

Both Donald Trump and his close ally Elon Musk have batted relentlessly for H1 B Visa arguing that it allows the country to employ the best merit from across the world and make the US what it is.

However, Donald Trump said, “I’ve always liked the visas… I have many H-1B visas on my properties. I’ve been a believer in H-1B. I have used it many times. It’s a great program.”

How Will It Impact India?

India will be hit most hard if any unfavourable decision is taken regarding the H1 B Visa. The US issues 85,000 visas under this category every year and almost 72% of them go to India, much to the chagrin of those who are alarmed at the rising clout of Indians in the country.

The controversy has hit the headlines in India in such a way that the Ministry of External Affairs, the Ministry of Information Technology and the Department of Commerce have become involved in tracking developments to prevent any “unpleasant issues” for Indian workers employed legally in the U.S.

The IT ministry has contacted software majors and industry associations like NASSCOM to assess the situation in the US. on the ground.

Why Will Indians Be Hit Hard?

Indians will be hit hard because lakhs of them are working in the US on H1B Visa, mostly in the IT sector. They are the most vulnerable because once laid off, they must leave the country within 60 days. According to Layoff.fyi, 438 tech companies sacked 1,37,500 workers, more than half of them from India on the visa last month.

According to a rough estimate, about 40% of Silicon Valley CEOs or founders are from South Asia or India. About one third of tech workers in the US are Indians.

Besides, thousands of Indians move to the US on H1 B Visa every year. According to the Office of Homeland Security Statistics, 755,020 people were granted H-1B in 2023.

The U.S. Citizenship and Immigration Services (USCIS) data suggest that Indians received the highest number of H-1B visas or 72.3% of all the H-1B visas issued by the U.S. during this period.

What If Minimum Wages Are Hiked?

If the US administration increases the threshold limit for the minimum wages for H1 B Visa, it will hit Indians hard.

The minimum annual wage for H1 B Visa is $60,000, which is considered a good salary.

The latest data of the Bureau of Labor and Statistics, suggest that the average salary in US is $68,124 per year or $5,677 per month.

However, annual salaries in the US range from $32,916 to $112,268, that include housing, transport, and other benefits.

If the salary threshold for H1 B Visa is increased, India tech workers will become expensive and this may throw open the opportunities to domestic US workers. Indians may get less opportunities.

Will It Hit US Economy?

However, experts believe, the US firms may find it difficult to hire domestic workers with required qualifications and experience and they may be forced to hire Indians at an increased cost.

Analysts also believe it may hit the US economy in general and tech companies in particular, as it may push the input cost, making most of the US services and products uncompetitive. It may further damage the US economy.

After Donald Trump became US President in 2016, he increased tariff on imports to justify his slogan of America First. However, it increased the input cost and many of the manufacturers in the Rust states were closed down.

Trump has won all of the Rust states on the same slogan. Will he learn lessons from the past mistakes?