Engineers hoping for an onsite in the US are set to receive another jolt as the Trump administration could soon increase the H-1B visa fee further, pushing IT companies to hire locally in the US.

US Labour Secretary Alexander Acosta told US lawmakers that an increase in H-1B visa application fee will raise funding for the expansion of an apprentice programme, which trains American youths in technology-related activities.

While the exact details of the visa-fee hike were not disclosed, Acosta, who was testifying before a Congressional committee on annual budget for the Department of Labour for fiscal 2020, argued that foreigners hurt American workers by competing for jobs and driving down wages.

Indian IT companies so far have been the biggest beneficiaries of the H-1B visa, but increased visa fee in the last few years along with higher scrutiny under the Trump administration has already resulted in a rapid decline in applications from India.

According to estimates, nearly 25 per cent H-1B visa applications were rejected last year, forcing companies to cut down on the applications.

While the Trump administration is pushing for local hiring by restricting migration, IT companies feel that there just isn’t enough IT talent available in the US. Most Indian IT services companies are heavily investing in hiring local talent in the US but the lack of availability of talent is forcing them to look at hiring in nearshore locations such as Canada and Mexico.

Large Indian IT services such as TCS, Infosys and Wipro are also heavily investing in STEM programmes in the US to develop IT talent in the country. All the large companies have also nearly doubled their US hiring in the last couple of years.

Expanding apprenticeships

According to Acosta, last year, the Department of Labour launched a sector-based grant fund to invest $150 million to expand apprenticeships in those in-demand industry sectors such as information technology, healthcare and advanced manufacturing.

This grant-funding opportunity introduced a new approach — a 35 per cent private-sector match requirement — which brought in an additional $57.7 million from the private sector, Acosta said.

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