U.S. Plans to Limit India’s H-1B Use Due to Localized Data Storage

Two of the more interesting tech issues, immigration and the cloud, are aligning: A new report suggests the United States is planning to limit the number of H-1B visas granted to Indian citizens over localized data storage. Localized data storage (or data localization) is the practice of storing cloud data in the country where its […]


Two of the more interesting tech issues, immigration and the cloud, are aligning: A new report suggests the United States is planning to limit the number of H-1B visas granted to Indian citizens over localized data storage.

Localized data storage (or data localization) is the practice of storing cloud data in the country where its users live. It’s part of the reason large firms such as Google have trouble providing services in places such as Russia and China: Those countries demand the data its citizens generate be stored at a datacenter within their borders. Currently, India only mandates that payment system data be stored locally (credit card info and transactional data, for instance).

Data localization laws are sometimes viewed as protectionist. Another thing widely viewed as protectionist: tariffs, a topic India and the U.S. are slap-fighting over ahead of the G20 summit this month in Japan. India instituted tariffs on 28 unique products, including agricultural imports, in response to President Trump revoking India’s “preferential trade privileges,” according to The Washington Post.

Indian officials claim the U.S. is set to make its tariff war about visas. From Reuters:

Two senior Indian government officials said on Wednesday they were briefed last week on a U.S. government plan to cap H-1B visas issued each year to Indians at between 10 percent and 15 percent 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.

The Washington Post also points out tariffs have become President Trump’s favorite political weapon since withdrawing the United States from the Trans-Pacific Partnership (TPP). Interestingly enough, the TPP included language to prohibit participating countries from demanding strict data localization. It’s also important to note that India hadn’t signed onto the TPP.

H-1B restrictions aren’t limited to India, either. Speaking with Reuters, a person familiar with the proposal said: “Any country that does data localization, then it… would be limited to about 15 percent of the quota,” adding, “It’s being discussed internally in the U.S. government.”

India appears to be scrambling: Its Ministry of External Affairs is reportedly asking for an “urgent response” from Indian officials on how H-1B restrictions may affect the country.

Just last month, President Trump proposed the H-1B visa program should be “merit-based,” and only open to those with “extraordinary talent.” The Trump administration has also begun to dismantle the H-4 EAD program, which grants spouses of H-1B employees the right to work in the U.S.

If these restrictions go through, they will bottleneck a talent source for tech companies, and severely limit how many Indian citizens can obtain an H-1B visa (which would be catastrophic for sourcing firms overseas). But that levels the playing field for other tech workers. Of course, like so many of President Trump’s other moves, this all hinges on the nuances of trade; the H-1B visa program is suddenly just a convenient bargaining chip.

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