Trump's immigration ban: Will it affect Indian IT sector? The story so far

On Tuesday, US President Donald Trump took to Twitter to announce the temporary suspension of the immigration. He tweeted, “In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!”
 

Well, the announcement came days after the US government allowed applicants for H-1B visas to continue in the country.
 

However, Trump talked about suspending immigration visas, and the H-1B visa, which is more popular among Indian IT professionals, is a non-immigrant visa. But his reasoning that he needs to protect jobs of American citizens indicates that non-immigrant work visas too might be on his target.
 

To remind, the H-1B visa allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.
 

Details of Trump's executive order were not immediately known. He also did not indicate when he would sign such an order.
 

In response to Trump’s tweet, India’s IT services industry body National Association of Software and Services Companies tweeted “NASSCOM seeks details on the Executive Order of the President of the United States suspending immigration temporarily.”

Speaking of the market’s reaction, shares of information technology (IT) companies were under pressure, falling by up to 6 per cent on the National Stock Exchange (NSE) in early morning deals on Tuesday.
 

Tata Consultancy Services (TCS), Infosys, Tech Mahindra, Wipro, HCL Technologies, Hexaware Technologies, NIIT Technologies and Mindtree were down 1 per cent to 5 per cent on the NSE in intra-day trade.
 

However, Nifty IT index has outperformed the market, down 2.1 per cent compared to 2.7 per cent decline in the benchmark Nifty 50 index.
 

It is understood that the move comes against the backdrop of an unprecedented economic crisis looming on account of the coronavirus pandemic, which has taken a heavy toll on the US.
 

Trump has already closed the Northern and Southern border that attracts a large number of illegal immigrants.
 

Due to the pandemic, the US has experienced a record layoff. As off last week, a record number of 22 million Americans have applied for unemployment benefits.
 

Besides, with the lockdowns in place and several client projects shutting down, many Indians on H-1B work visas have also either lost jobs or are stuck in the US since Indian airspace is also shut.
 

That apart, amid a coronavirus-induced supply glut, a historic collapse in the US crude futures saw it turn negative for the first time in history. The May contract of US WTI crude oil tumbled as low as minus $40.32 a barrel overnight, before recovering to around $2 a barrel.

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