Washington/New Delhi, June 20: The United States of America is mulling caps on H-1B visas on India days before the Secretary of State Mike Pompeo's visit to New Delhi. The cap - under which skilled foreign workers are brought to the US each year - is being considered by the Americans for the nations which store data locally, reports Reuters.

With the new move in place, the already bitter relations - on trade and tariffs - are likely to spike in the coming days. The move would not only affect the Indian software companies, but also the global IT giants based in the US who seek to hire local talent from India in a bundle. H-1B Visa Allocation to Top 5 Indian IT Firms Drops by 49%, US Restrictions Compel Tech Companies to Hire More Locals

The latest initiative by the United States comes days after India upset firms such as Mastercard and irked the US government with stringent new rules on data storage. The tit-for-tat tariff actions in recent weeks would not only harm the trade between the two nations, but likely to even dampen the business opportunity US is looking with India, under the newly elected BJP government at the Centre.

Under the new plan by the United States, the cap on H-1B visas would be between 10 per cent and 15 per cent of the annual quota for Indians. However, currently, as there is no limit, an estimated 70 per cent of H-1B visas go to Indians.

Apart for this valid information, sources say that plan was linked to the global push for 'data localisation', in which a country places restrictions on data as a way to gain better control over it. Also, this potentially curbs the power of international companies. The US has till now lobbied hard against data localisation rules around the world.

(The above story first appeared on LatestLY on Jun 20, 2019 01:23 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).