The US Congress has barred firms receiving the government bailout from hiring Indians and other foreign workers through the skilled worker visa (H1-B) programme, if they are replacing American workers.
The bar comes even as IT firms in the US and India are demanding an increase in the H1-B visa, which is capped at 65,000 a year now.
Indians account for a majority of those with H1-B visa, issued to non-immigrant skilled workers for up to six years.
Restricting hiring of H1-B visa holders forms part of American Recovery and Reinvestment Act, widely known as the stimulus bill, that was passed by the Congress yesterday.
With thousands of jobs being cut by US companies almost daily over the past few months, there have been widespread apprehensions that these positions could go to low-cost foreign workers or might be outsourced to places like India.
The government data for 2008 shows that about 5.7 lakh Indians were issued H1-B and other non-immigrant visas.
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Experts believe the Congress' move would certainly impact hiring of H1-B visaholders, thus affecting in a big way the engagement of Indian techies in the US, but might not affect outsourcing of jobs to places like India.
About two years ago, the US had cut down the H1-B visa limit to 65,000, from 1,95,000 a year previously.
IT firms, both Indian and American, have been asking to raise the cap to allow the companies in the US greater access to the growing talent pool across the world.