image courtesy : RTE

US President Donald Trump’s proposal for immigration reforms to encourage merit-based migration might help India’s export-focused software and information technology (IT) sector.

Mr. Trump noted that “nations around the world, like Canada, Australia and many others have a merit-based immigration system.” Such a system would save countless dollars and raise workers’ wages.

He also said, “Switching away from this current system of lower-skilled immigration, and instead adopting a merit-based system, will have many benefits; it will… raise workers’ wages, and help struggling families,including immigrant families ,enter the middle class.”

Indian IT companies, such as Tata Consultancy Services, Infosys and Wipro, as well as multinationals like Google, IBM and Facebook send engineers on work visas to work on client locations in the US.They account for nearly 70 per cent of H1B visas issued every year to high-tech workers

Mr. Trump introduced the idea of a merit-based immigration system after invoking the memory and words of late President Abraham Lincoln, saying, “Lincoln was right ,and it is time we heeded his words. Switching away from this current system of lower-skilled immigration, and instead adopting a merit based system, will have many benefits: it will save countless dollars, raise workers’ wages, and help struggling families,including immigrant families,enter the middle class,” he said in a State of the Union-style address that lasted for an hour.

During his election campaign last year, Trump had called for tougher immigration laws for technology companies, and had threatened to impose taxes on companies that moved work offshore.

In January this year, the Democratic lawmaker from Silicon Valley, Zoe Lofgren, introduced a Bill in the US Congress to mandate companies who employ workers on H1B visa to double their pay to $130,000 a year from the current $60,000.

Since then, India has been aggressively lobbying with the US government for a free movement of technical talent. The National Association of Software and Services companies (Nasscom), the trade association of Indian IT firms, has said outsourcing helps generate 50,000 jobs in the US and about $20 billion in taxes. It also pointed the US might face a shortage of over a million software engineers in the next few years.

Trump appealed to the Democrats for bipartisan support for immigration reform.

“If we are guided by the well-being of American citizens, then I believe Republicans and Democrats can work together to achieve an outcome that has eluded our country for decades,” he said.

Analysts said the US government realised challenges in getting high-skilled workers while undertaking immigration reform.