To counter India’s pressure on storing data locally, the United States has told India it is considering caps on H-1B work visas. It is specifically targeted at nations that force foreign companies to store data locally, widening the two countries' row over tariffs and trade, stated a report on Reuters.
The plan to restrict the popular H-1B visa programme, under which skilled foreign workers are brought to the United States each year, comes days ahead of US Secretary of State Mike Pompeo's visit to New Delhi.
India, which has upset firms such as Mastercard and irked the US government with stringent new rules on data storage, is the largest recipient of these temporary visas, most of them to workers at big Indian technology firms.
The warning comes as trade tensions between the United States and India have resulted in tit-for-tat tariff actions in recent weeks. From Sunday, India imposed higher tariffs on some US goods, days after Washington withdrew a key trade privilege for New Delhi.
Two senior Indian government officials said on Wednesday they were briefed last week on a US government plan to cap H-1B visas issued each year to Indians at between 10% and 15% of the annual quota.
There is no current country-specific limit on the 85,000 H-1B work visas granted each year and an estimated 70% go to Indians, said a Reuters report.
Both officials said they were told the plan was linked to the global push for "data localisation", in which a country places restrictions on data as a way to gain better control over it and potentially curb the power of international companies. US firms have lobbied hard against data localisation rules around the world.
The US Embassy in New Delhi did not respond to a request for comment neither did a spokeswoman for the US Trade Representative's office (USTR).
Most-affected by any such caps would be India's more than $150 billion IT sector, led by Tata Consultancy Services and Infosys Ltd, which uses H-1B visas to fly engineers and developers to service clients in the United States, their biggest market.
The Ministry of External Affairs has sought an "urgent response" from officials on how such a move by the United States could affect India, said sources.