Washington informs India of possible caps on H-1B visas over stored data concerns

The US has told India it is considering caps on H-1B work visas for nations that force foreign companies to store data locally, three sources with knowledge of the matter told Reuters, widening the two countries’ row over tariffs and trade.

The plan to restrict the popular H-1B visa program, under which skilled foreign workers are brought to the US each year, comes 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 to workers at big Indian technology firms.

The warning comes as trade tensions between the US 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 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 percent 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 localization rules around the world.

A Washington-based industry source aware of India-US negotiations also said the US was deliberating capping the number of H-1B visas in response to global data storage rules. The move, however, was not solely targeted at India, the source said.