The visa programme was approved in January by the then Barack Obama administration and was meant to allow foreign entrepreneurs who started companies in the US to live in that country — a longstanding demand of the Silicon Valley. It was supposed to come into effect on July 17.
Immigrants have started more than half of US startups valued at $1 billion dollars or more, and are key members of either management or product development teams in more than 70% of these companies, according to a 2016 study by the National Foundation for American Policy (NFAP), a US-based non-profit nonpartisan public policy think tank. Out of these, people of Indian origin have founded almost 30%.
Indian-American technology entrepreneur and academic Vivek Wadhwa called the policy "brain-dead" and a "lose-lose" for the US. "Without doubt, bringing in entrepreneurs creates American jobs and expands the economy, it is the closest thing there could be to a free lunch for the United States. This is a lose-lose for the US and for the entrepreneurs who would have come here but it will benefit the countries where they would have come from."
Wadhwa, who is a Fellow at Carnegie Mellon University Engineering in Silicon Valley, added that countries such as India and the rest of the world could gain from this. "This is the type of brain-dead policy that is becoming a hallmark of the Trump administration. They are pandering to anti-immigrant groups rather than focusing on US competitiveness and economic growth," said Wadhwa.
As per the NFAP study, 14 Indian-origin entrepreneurs have started billion dollar companies in the US which are collectively valued at $19.6 billion. The foundation had evaluated 87 startup companies valued at over $1 billion as of January 1, 2016, for the study. The Obama administration's idea was to keep high-calibre talent who come to the US for studies but return to their countries and start businesses that become huge successes.
Puru Vashishtha, a Valley-based Indian entrepreneur-investor who studied at Stanford University, said the startup visa would have been great for Indian and Israeli students. "Imagine if Vinod Khosla had to come back to India to work in Infosys. That would have been a big loss for innovation. Unfortunately, it's already happening now, due to difficulties faced by international students and immigrants to become entrepreneurs. Countries like Canada are taking advantage of it, but they don't have big enablers that Silicon Valley provides and a big market that US readily provides," he said.
Vashishtha added that he has witnessed the struggle of many of his Stanford friends without the startup visa. "These were highly trained, best minds in the world. They wanted to do product startup in the Valley. Unfortunately, because of being a foreign national, even a top university graduate does not get the same options as rest of her US classmates. This is regressive and it deprives the US from significant value creation and job creation. startup visa was a big hope."
According to a 2012 study, companies founded by immigrants in the US have created more than 10 million jobs and over $4.5 trillion in annual revenue.
On Monday, the US Department of Homeland Security issued a memo saying that the rule will now be launched on March 14, 2018 and it will solicit comments from the public about rescinding the rule, and "may ultimately eliminate the program."
"Given the real shortage of tech talent in the US, this startup visa would have been a great enabler. It has the potential to take the innovation to the next level. This move to cancel it is a big setback," said Vashishtha.