NEW DELHI: The United States has clarified that it has no plans to place caps on H-1B work visas for nations that force foreign companies to store data locally.
''This review is not targeted at a specific country,'' the US Government said in a statement, according to ANI.
US Government Statement on H1B: US has no plans to place caps on H-1B work visas for nations that force foreign companies to store data locally. This review is not targeted at a specific country.
— ANI (@ANI) June 21, 2019
Allaying fears that the proposed caps on H-1B work visas will affect the Indian skilled workers most, the US Government statement said, ''It is completely separate from our ongoing discussions with India about the importance of ensuring the free flow of data across borders.''
US Government Statement on H1B: It is completely separate from our ongoing discussions with India about the importance of ensuring the free flow of data across borders.
— ANI (@ANI) June 21, 2019
The clarification from the US government comes in the wake of media reports claiming the Donald Trump Administration is considering to put caps on H-1B work visas for nations that force foreign companies to store data locally.
This had widened the ongoing row between the two countries over tariffs and trade.
The report on US' plan to restrict the popular H-1B visa programme, under which skilled foreign workers are brought to the United States each year, came days ahead of US Secretary of State Mike Pompeo`s visit to New Delhi.
India, which has upset companies 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 are given to the Indian IT sector employees.
The report came as trade tensions between the United States and India 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 were quoted by Reuters as saying that 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.
However, 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.
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.
Most affected by any such caps would be India`s more than USD 150 billion IT sector, including Tata Consultancy Services and Infosys Ltd, which uses H-1B visas to fly engineers and developers to service clients in the United States, its biggest market.
Major Silicon Valley technology companies also hire workers using US work visas.
In the wake of the report on H-1B visas, the Ministry of External Affairs sought an "urgent response" from officials on how such a move by the United States could affect India.
The Narendra Modi Government had last year made it compulsory for foreign firms to store their payments data "only in India" for supervision amid ongoing work on a broad data protection law that would impose strict rules for local processing of data it considers sensitive.
This has disappointed the Trump Administration, which is of the opinion that the US companies such as Mastercard and Visa are suffering due to regulations in several countries for storing more data locally.
While governments the world over have been announcing stricter data storage rules to better access data in their jurisdictions, critics say restricting cross-border data flows hurts innovation and raises companies` costs.