Uncle Sam may hit back over fear of countries storing their own data, report

Last Updated: Thu, Jun 20, 2019 19:28 hrs
Trump Made in USA

The US administration may be planning to limit H1-B work visas to candidates from countries that impose data localisation norms. That, if a report published by Reuters is to be believed.

On Wednesday the agency published a report saying three officials with knowledge on the development as explaining that the US administration was planning on implementing a policy. The policy would have a country-specific quota on the number of H1-B visas. The USCIS page does not elaborate on a country specific quota for H1-B visa application.

The report also says that countries that pushed for a data localisation policy would see their H1-B visas limited to a specific percentage.

In the report, an official is quoted as saying, "The proposal is that any country that does data localisation, then it (H-1B visas) would be limited to about 15% of the quota. It's being discussed internally in the U.S. government," the person said. The news agency also stated that a spokeswoman for the U.S. Trade Representative's office (USTR) referred questions to the State Department which did not respond to a request for comment.

For FY20, a USCIS report said that caps for H1-B regular visas were limited at 65,000 and for H1-B advanced degree exemption at 20,000. However, in FY18, the US Citizenship and Immigration Services (USCIS) in a note said that it had approved 335,000 H-1B visas (both new and renewable). This was 10 per cent less from 373,400 in FY17. The agency said that it's approval rates for H1-B visas declined from 93 percent to 85 percent.

Such reports assume significance given the recent trade talks between the two countries. While the US curtailed tariff benefits under a GSP program, India spoke on tariffs for 29 items imported from the US.

The data localisation issue has remained a thorn in the flesh for several technology firms offering services in India. Last year, the RBI mandated a six month policy for overseas firms to start payments related data locally within India. Tech firms such as Whatsapp , Google Pay, Microsoft, Apple, Mastercard and others were expected of storing data locally.

Most tech-firms admitted that they had a system in place to store data locally but many also sought a policy intervention to ensure a smooth flow of data across borders. For instance, Google's CEO Sundar Pichai sought IT and Law Minister Ravi Shankar Prasad's intervention. He wrote to Prasad that free flow of data would encourage global companies to India's digital economy.

Several countries have some form of law on data localisation and governance. The EU General Data Protection and Regulation laws addresses export of personally identifiable data outside of EU. In the case of China, their central bank in 2011 mandated financial information collected within their territory to be stored, processed and analyzed within China.

Four days ago, Law and IT minister Ravi Shankar Prasad was quoted as saying at the sidelines of an industry gathering that a data protection bill was almost finalised. "We have finalised the data protection law. I will take it to the Cabinet. We have had 3-4 rounds of consultation," he said.

The prospects of the US administration contemplating a new policy sparked a mini-furore with tech indices on the Bombay Stock Exchange taking a hit. The BSE Information Technology index was up marginally by 0.28 percent. That, on a day when the Sensex posted a 488 point gain.

So far, no US official has clarified on that report. India's Foreign ministry spokesperson Raveesh Kumar was quoted in a PTI report as saying that US officials had shared nothing on the limits. He said, "We have not heard anything officially from the US government. We continue to reiterate and engage with the US government on this matter."

Nasscom, India's industry trade body on Software & Technology shared in a note that such a move by the US administration would weaken American companies that need to fulfill gaps. “If US policy make it more difficult to hire advanced tech workers, it will only weaken the US companies that depend on them to help fill their skills gaps, put jobs at risk, creating pressure to send technology services abroad,”

Nasscom further said that increase in visa scrutiny lead to a decline in number of H1B visas for Indians. This has lead to 7.5 million specialized jobs remaining unfulfilled. "It is this very unmet technical requirement that skilled immigrants, including workers on H-1B visas, have helped meet in the US... The US’ global leadership in technology has been made possible, in part, by its ability to attract the most talented workers from around the world,"

Meanwhile, US secretary of State Mike Pompeo will be visiting India from June 25-27. All eyes will be on Pompeo, a man who chanted "Modi hai toh Mumkin Hai" at the sidelines of a conference last week.

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