Protectionism is in the air—and the US seems to have taken an early lead. The US Congress has decided to bar companies that are getting bailout money from hiring foreigners under the popular H1-B visa programme. The deal is a simple one: We will give you the billions of dollars you need only if you agree to hire US citizens. Indian tech workers have been one of the biggest beneficiaries of this programme. As layoffs loom, these Indians may lose their jobs and, subsequently, visas to reside in the US.
This follows from a controversial part of the US stimulus package that expects American inputs to be preferred in public infrastructure projects. The new visa restrictions show that protectionism could emerge in both trade and jobs.
Many other countries could follow suit and push the world economy into a deeper mess. The challenge for the world’s largest economies—including India—will be to ensure that movements of goods and people are not hampered in this downturn.