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Taking a cue from the US and the UK, Australia has scrapped its skilled visa category. Indians are among the highest users of this visa category, officially called the 457 visa. There are about 24,000 Indians using this visa to work in Australia.
The Australian government is replacing the 457 visa so Australians get priority in hiring for local jobs. The skilled visa category will now be replaced with two new temporary work visa categories, available for two or four years. They will require visa-holders to have two years’ work experience, a criminal record check, and “in the majority of cases”, mandatory labour-market testing.
Nasscom, however, said the move should not have a major impact on visas granted to Indian IT workers as the Australian government is largely targeting low-wage workers through the policy change.
“This will only be applicable from March 2018. Although we need to do a detailed assessment, our initial understanding suggests that the new categories will reduce the number of awarded visas. There will, however, be an ICT category to award visas. We’ll need to read between the lines,” Shivendra Singh, Vice-President and Head, Global Trade Development at Nasscom, told BusinessLine . “The government is examining the consequences of the new policy in consultation with all stakeholders. This is also a matter we will be looking at in the context of CECA negotiations,” said Gopal Baglay, Spokesperson, Ministry of External Affairs.
This comes even as US President Donald Trump is set to sign an executive order aimed at curbing the existing lottery system of awarding H-1B visas and likely requiring a higher wage level for visa applicants.
Limited options“If there is talk on raising the wage level, it should apply to all visa holders and not just on companies dependent on H-1B visas because then it would lead to abuse of the system and defy the purpose of the exercise,” said Singh. “There is talk on the removal of the lottery system for H-1B visas from next year; we’ll have to see how it pans out.”
IT companies, including Infosys and TCS, have already been trying to cut down their dependency on H-1B visas and have pared applications by two thirds in the last couple of years.
However, further restrictions on H-1B visas might require more local hiring, increasing costs significantly.
Earlier this month, the UK banned the issue of a short-term ‘Tier 2’ visa, which was primarily being used by Indian IT service companies to send engineers to work on projects in the UK.
Analysts believe the protectionist moves by the three big nations will have a big impact on the margins of Indian IT service companies, which have already been narrowing.
“It will impact the ability of Indian IT services companies to staff projects in different countries,” said Pareekh Jain, SVP and MD, India, HfS Research.
With inputs from Nayanima Basu in New Delhi
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