Nirmala Sitharaman hits back at US' protectionist measures: Will H-1B Visa turn into diplomatic row with Trump's America?

A day after US President signed an executive order to review H-1B visa policy that may affect thousands of IT professionals working in America, Union Commerce Minister Nirmala Sitharaman on Thursday reminded Donald Trump that not just Indian companies in the US, several big US companies are in India too.

"They are also here, they are earning their margins, they are earning their profits which goes to the US economy," Sithraman said.

Ever since Donald Trump filed his nomination for US Presidential election, he has been talking about 'Make America Great Again'. And, at the centre of his campaign was his commitment to bring back jobs that America lost to developing countries.

Trump claims that several India IT companies have 'abused' the US visa policy by sending less-qualified professionals to the US. Now that he is in power, Trump wants to review the whole H-1B programme and promote local hiring to reduce the unemployment.

Donald Trump's latest move has irked the Indian officials and that may be the reason behind Commerce Minister Nirmala Sitharaman's strongly-worded reaction on his executive order to review  H-1B visa programme.

According to a report in the Mint, India has signalled it could respond to the US move to restrict H-1B visas by capping the royalty payout by American companies in India to their parent firms. The move, if implemented, risks escalating into a full-blown trade war that could harm the otherwise warm relationship between Indian and the US, the report said.

In the last couple of months, countries like the US, the UK, Australia and New Zealand have made their visa norms stricter for movement of skilled professionals. Earlier this month, Australia abolished a visa programme used by over 95,000 temporary foreign workers, majority of them Indians, to tackle the growing unemployment in the country.

"We are an immigration nation, but the fact remains: Australian workers must have priority for Australian jobs, so we are abolishing the 457 visa, the visa that brings temporary foreign workers into our country," said Prime Minister Malcolm Turnbull. 

Sitharaman's remarks have come in the backdrop of this rising protectionism which she underlined when she said that developed countries are clearly raising protectionist walls with regard to flow of labour.

Sitharaman wants US to keep few things in mind while reviewing its business policies. She said: "So, it is a situation where it's not just Indian companies that have to face the US executive order, there are several US companies in India who are doing business for some years now and therefore I want this whole debate to be ... if it has to be expanded, it has to be expanded to include all these aspects and we shall ensure that all these factors are kept in mind."

Meanwhile, Finance Minister Arun Jaitley has also raised this issue with US Commerce Secretary Wilbur Ross. He is leading an Indian delegation to attend the annual Spring meeting of the International Monetary Fund and the World Bank in US. According to reports, Ross is believed to have said that the US has started the process of reviewing H1B visas issues and no decision has been taken on it yet.

Trump, meanwhile, on signing the executive order, that calls for a review of the H-1B visa programme, said they should never be used to replace American workers and be must given to the most skilled and highest paid applicants.

Under a new executive order, Donald Trump proposes to replace the current lottery system for issuing H-1B work visas with a merit-based approach. The country is reviewing its visa programme for foreign workers to curb purported abuse and frauds related to visas.