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Unlocking India’s Space Potential: India Liberalizes Foreign Direct Investment Regime

The foreign investment policy was ambiguous about space activities beyond satellites, leading to different interpretations.
Some companies made investments basis the view that investments in the activities not listed under the FDI policy in this sector could be made up to 100% without prior government approval.
The proposed FDI Space Policy addresses these concerns and allows 100% foreign investments under the automatic and governmental approval route.
Formal notification is awaited which will make this policy effective as law.

Background

India currently is home to more than 200 space start-ups, and the space sector in India has attracted USD 124.7 million investment in the year 2023. The existing foreign investment policy of India (“FDI Policy”) requires foreign investors to obtain prior government approvals for investing in the space sector, particularly for the establishment of satellites.

Considering the growth of this sector, the Indian government has been periodically releasing policies / notifications, establishing organizations, etc. with the intent to allow more private participation in this sector. This has led to the establishment of an organization to promote the sector called the Indian National Space Promotion and Authorization Centre in 2020, as well as the introduction of the National Geospatial Policy, 2022 followed by the Indian Space Policy, 2023.

On February 21, 2024, the Union Cabinet approved amendments to the Foreign Direct Investment (“FDI”) policy and communicated it in a press release (“FDI Space Policy”) which proposes to liberalize investments in the space sector. However, a formal notification from the relevant authorities is still awaited for the amendments to become enforceable as law.

Existing FDI Policy

Existing foreign investment limits in the space sector are provided under the Schedule I of Foreign Exchange Management Act (Non-Debt Instrument) Rules, 2019 (“NDI Rules”). The current norms do not recognize “space” as a sector in itself. Instead, the space related activities are primarily captured under the head – “satellites – establishment and operation”. 100% foreign investment is allowed in this sector but the same is subject to approval from the government along with compliance of sectoral guidelines from Department of Space / Indian Space Research Organisation. In essence, all foreign investments in companies undertaking the activities of satellites-establishment and operations require government approval.

Reforms – New FDI Space Policy

The proposed FDI Space Policy allows 100% foreign investment in the space sector and has also created sub-categories, entry route and investment thresholds for various space related activities, which are as follows:

S.no.	Activity	FDI Thresholds
1.	Satellites-manufacturing & operation, satellite data products and ground segment & user segment	Up to 74% under automatic route and beyond 74% (up to 100%) under government route
2.	Launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft	Up to 49% under automatic route and beyond 49% (up to 100%) under government route
3.	Manufacturing of components and systems/ sub-systems for satellites, ground segment and user segment	Up to 100% under automatic route

Analysis

(i) Status of existing investments

The existing FDI policy did not include space sector related activities (other than satellites-establishment and operation) such as launch vehicle business, ground segment, user segment, sub-component / sub-systems manufacturing, data products etc.

Various stakeholders argued that since the existing FDI policy did not specify certain activities such as launch vehicles, data sets, manufacturing of space systems / components etc. under the head of “satellites-establishment and operation”, foreign investments in such cases should be permitted up to 100% under the automatic route. This was based on the interpretation under the FDI policy that sectors / activities not specifically listed or prohibited, are permissible for foreign investment up to 100% under the automatic route, subject to sectoral conditionalities. Relying on the same, foreign investors made investments in space start-ups whose activities were not explicitly listed or regulated under the current FDI regime without obtaining government approval.

Some stakeholders interpreted “satellites” very broadly and took a more conservative view that all space related activities required government approval. Similarly, there were overlaps in activities / interpretation of the FDI policy under the sectors of defence, telecom and manufacturing.

The space liberalization norms under the proposed FDI Space Policy may have actually de-liberalized this sector for certain companies who received investments in allied space activities based on the understanding that sectors / activities not specifically listed or prohibited, should be eligible for foreign investments up to 100% under the automatic route. In such cases where the investment thresholds under the proposed FDI Space Policy may be breached, it would be interesting to see the government’s approach including granting approvals on a post-facto basis.

(ii) Sub- categorizations of activities within the Space Sector

While the government has acknowledged the sub-categories of activities within the space sector, it hasn’t clarified its rationale for providing different foreign investment thresholds for such activities. Relaxed thresholds for satellites (i.e., 74% under the automatic route (up to 100% under government route)) and its sub-components (i.e., 100% under the automatic route) encourage foreign participation in commercial aspects of space activities. In contrast, the 49% cap on foreign investments under the automatic route (up to 100% under government route) on launch vehicles acknowledge their dual-use potential for both civilian and defence purposes. This sensitivity, combined with the launching state’s heightened liability under Article II of the Convention on International Liability for Damage Caused by Space Objects (“Liability Convention”), may be viewed as necessitating greater government oversight.

However, industry players have also criticized the differential treatment provided to launch vehicles vis-a-vis satellites. They believe, in essence, both industries have similar sensitivity issues and hence should be treated at par from a foreign investment perspective. Hence, the difference in foreign investment thresholds require more explanation from the government.

(iii) Satellite Data Products

The term ‘satellite data products’ has not been defined under the proposed FDI Space Policy but investments in such activities would be permitted up to 74% under the automatic route (up to 100% under government route). This may lead to some conflict from a satellite imagery / data perspective read along with the liberalized Geospatial Guidelines, 2021. (“Geospatial Guidelines”).

The Geospatial Guidelines largely permit foreign investments up to 100% under the automatic route with limited foreign investment restrictions especially if the activity is for (i) creation / ownership / storage of geospatial data of a certain accuracy (as defined under the Geospatial Guidelines); (ii) terrestrial mobile survey, street view survey and surveying activities in Indian territorial waters. There seems to be no specific restriction on satellite generated data (other than the above) under the Geospatial Guidelines. Thus, the proposed FDI Space Policy may end up limiting foreign investments for activities relating to Satellite Data Products (which would include geo-spatial data) in which otherwise is viewed to be permissible up to 100% under the automatic route.

The government should also define what constitutes satellite data products and to the extent possible it would be recommended that foreign investment up to 100% should be permitted under the automatic route.

Additionally, the rationale for capping investments for satellite data products under the proposed FDI Space Policy seems unclear as these are data sets which could be regulated under the Geospatial Guidelines and the new Indian privacy law.

(iv) Where are sub-components for launch vehicles covered?

The proposed FDI Space Policy explicitly covers the manufacturing of components and systems / sub-systems for the satellite sector, ground & user segment, and permits 100% FDI under automatic route for the same. With the absence of similar language for components in launch vehicles, it could imply its inclusion under the broader launch vehicle category, hence falling under the 49% automatic route (up to 100% under government route). Alternatively, it could also be argued since it is not expressly specified, the same could be covered under the 100% automatic route category. However, considering the critical role of such components in the sector’s development, clarification from the government would provide much-needed comfort especially if the components are dual use (satellite and launch vehicle usage).

(v) What about ground segment and user segment for launch vehicles?

Following the pattern observed with the satellite and ground segment categories, the absence of specific mention for the “ground segment & user segment” in the launch vehicle section raises further questions. This omission could be an oversight or intentional, but the lack of clarity hinders transparency and predictability for potential investors. Further clarity on the inclusion from an industry perspective in the official amendment notification would ensure a comprehensive and consistent policy framework for the entire launch vehicle sector.

(vi) Were any sub-categories / activities missed?

As space activities may expand to include space mining, exploration, international space station construction, space tourism etc., India needs to proactively address these areas. Especially, if these should be interpreted for foreign investments up to 100% under the automatic route, as this would have a bearing on India’s ability to attract foreign investment while safeguarding national interests, technological competitiveness, and responsible stewardship of India in space.

Conclusion

While the proposed FDI Space Policy provides substantial liberalization, further clarity is awaited based on the formal notification which will make this effective as law. Ideally, the Government should provide definitions / explanations for the proposed categorization and sub-categorizations, and further clarity on the inclusions and omissions of activities which may be related to most space sector functions such as user and ground segments.

While the move towards liberalization significantly reduces government control over the space sector, its inherent interconnectedness with other regulated domains like telecommunications / geospatial cannot be ignored. Despite these challenges, the government’s willingness to open the space sector to foreign investments is a positive step offering greater confidence to foreign investors. Relaxation in the existing norms also signifies a supportive stance towards the industry, encouraging both domestic and international participation. Notably, India successfully attracted substantial foreign investment even during the era of full government control. Therefore, with the current reforms, a significant increase in foreign investments is expected.

Footnotes
[1] Rajya Sabha Questions, Department of Space, available at
https://sansad.in/getFile/annex/262/AU621.pdf?source=pqars
[2] Notification, Department of Space, available at https://pib.gov.in/PressReleasePage.aspx?PRID=1988864
[3] Notification, Ministry of Commerce & Industry, available at
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2007876
[4] Article II of the Liability Convention provides that a launching State shall be absolutely liable to pay compensation for damage caused by its space object on the surface of the earth or to aircraft flight.

Domestic Visa Processing – Application Slots Now Available

On January 29, 2024, the Department of State’s stateside visa pilot renewal program began accepting DS-160s for qualifying individuals seeking to renew their existing H-1B visas while they are in the United States. As discussed in our previous blog post about this new program, the program allows individuals in the United States who are renewing an H-1B visa issued by US consular sections in Canada between 1/1/2020 and 4/1/2023 or one issued by US consular sections in India from 1/2/2021 and 9/30/2023 to do so online through the Department’s CEAC website rather than having to travel outside the US to obtain the visa.

Under the pilot program, each week for five weeks the Department will release 4000 application slots—2000 for applicants whose most recent H-1B visa were issued in Canada, and 2000 for those whose most recent H-1B visas were issued in India. If all designated slots are filled before the next week’s allotment becomes available, the Department will lock the portal until the next group is released. Applications can be submitted online at https://travel.state.gov/content/travel/en/us-visas/employment/domestic-renewal.html, where you can also find program FAQs published by the Department of State.

The first group of application slots was released on Monday, January 29. Later groups will be released on February 5, February 12, February 19, and February 26. The program will end when all available slots are filled or on April 1, 2024, whichever happens first.

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November 2022 Visa Bulletin – A Warning for EB-2 All Other Countries

The Visa Bulletin is released monthly by the Department of State and is used to determine when a sponsored foreign national can submit the final step of the green card process, or if already pending, when the final step can be adjudicated.

Below is a summary of the November Visa Bulletin, including Final Action Dates and changes from the previous month.

China: EB-1 remains current; EB-2 holds at June 8, 2019; EB-3 freezes at June 15, 2018; EB-3 other workers advances three months to December 1, 2012.

India: EB-1 remains current; EB-2 holds at April 1, 2012; EB-3 freezes at April 1, 2012; and EB-3 other workers remains April 1, 2012.

All Other Countries: EB-1, EB-2 and EB-3 remain current (except for EB-3 Other Workers which has a cutoff date of June 1, 2020).

NOTE 1: The November Visa Bulletin warns of possible future retrogression in the EB-2 All Other Countries category due to increased demand for overall visa numbers.

NOTE 2: USCIS will accept I-485 applications in November based on the Department of State’s slightly more favorable Dates for Filing chart.

This post was written by Courtland C. Witherup and the Immigration & Nationality Law Practice at Hunton Andrews Kurth.

For more immigration legal news, click here to visit the National Law Review.

Your Employee As Your Arbitrator? Maybe!

The Hon’ble Supreme Court of India (“Court”) has, by its order dated August 24, 2009, in the matter of Indian Oil Corporation Ltd. & Ors. (“Appellants”) Vs. M/s. Raja Transport (P) Ltd. (“Respondent”)¹, once again upheld that the Court must give full effect and meaning to the appointment procedure set by the parties in the arbitration agreement before appointing arbitrator of their choice.

BRIEF FACTS OF THE CASE:

The Appellant and Respondent entered into an agreement dated February 28, 2005 (“Agreement”), where under, the Respondent was appointed as the dealer of the Appellant for the retail sale of petroleum products. Clause 69² of the Agreement provided for settlement of disputes by arbitration where the Director, Marketing of the Appellant, or a person appointed by him, was to act as the sole arbitrator.

On August 06, 2005, the Appellant terminated the dealership. The Respondent filed suit in the Civil Court, Dehradun, seeking (1) a declaration that the order of termination of dealership was illegal and void and (2) for a permanent injunction restraining the Appellant from stopping the supply of petroleum products to the retail outlet of the Appellant. In this same suit, the Appellant filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (“the Act”), praying that the suit be rejected and the matter be referred to arbitration in terms of Section 69 of the Agreement. The Ld. Judge allowed the Appellant’s application and directed the parties to refer the matter to arbitration within two months and also directed the Appellant not to stop supplies to the Respondent for a period of two months.

Both parties challenged the said order before the District Court, Dehradun. The Respondent also filed an application under Section 9 of the Act seeking an interim injunction against the Appellant. Both appeals and the Section 9 application were disposed off by a common order dated January 20, 2006, whereby, both appeals were dismissed and the Section 9 application was allowed, retraining the Appellant from interrupting the supply of petroleum products to the Respondent for two months as well as directing the parties to refer the matter to arbitration as per the agreement, within the said period of two months.

While the appeals were pending, the Respondent issued letter dated January 04, 2006, through their counsel, wherein, the Respondent, referring to the Appellant’s insistence that only its Director, Marketing could be appointed as the Arbitrator, inter alia alleged that it (the Respondent) did not expect fair treatment or justice if the Director, Marketing or any other employee of the Appellant was appointed as the Arbitrator and called upon the Respondent to have a joint meeting so as to enable the parties to mutually agree on an independent arbitrator. This request was not accepted by the Appellant.

Thereafter, the Respondent filed an application before the Chief Justice of the Uttaranchal High Court under Section 11(6) of the Act for appointment of an independent arbitrator to decide the dispute. This application⁷ was allowed and a retired High Court Judge was appointed as the Sole Arbitrator to decide the dispute. The Ld. Chief Justice inter alia assigned the following two reasons to appoint a retired Judge as an Arbitrator instead of the persons as named in the arbitration agreement.

The Director (Marketing) of the Appellant, being its employee, should be presumed not to act independently or impartially.
1. The Respondent had taken steps in accordance with the agreed appointment procedure contained in the arbitration agreement and directions of the civil court by issuing notice dated January 04, 2006, calling upon the Appellant to appoint an arbitrator. After receipt of the said notice, the Appellant had to refer the matter to its Director, Marketing, which it did not do, nor did it take any steps for the appointment of an Arbitrator. The Appellant had, thus, failed to act as required under the agreed procedure.
Aggrieved by the said order, the Appellant preferred an appeal before the Court.

JUDGMENT:

The facts and circumstances of this case raised three issues for the Court to consider:
1. Whether the Ld. Chief Justice of the Uttaranchal High Court was justified in assuming that when an employee of one of the parties to the dispute is appointed as an arbitrator, he will not act independently or impartially.
On this issue, the Court inter alia noted as under:
- Arbitration is a binding and voluntary dispute resolution process by a private forum so chosen by the parties.
- Where a party, with open eyes and full knowledge and comprehension of the said provision enters into a contract with a government/statutory corporation/public sector enterprise, where such arbitration agreements providing for settlement of disputes where the arbitrator will be one of its senior officers, were common, such party cannot subsequently turn around and contend otherwise unless performance of that part of the arbitration agreement is impossible, or is void being contrary to the provisions of the Act.
- It was settled law that arbitration agreements in government contracts providing that an employee of the department (usually a high official unconnected with the work or the contract) will be the arbitrator are neither void, nor unenforceable.
- Whilst the provisions relating to independence, impartiality and freedom from bias are implicit under the Arbitration Act, 1940, the same are made explicit in the Act.
- This position may differ where the person named as the arbitrator is an employee of a company/body/individual other than the state and its instrumentalities e.g. a Director of a private company who is party to the arbitration agreement. In such cases, there may be a valid and reasonable apprehension of bias in view of his position and interest. In such cases, the court has the discretion not to appoint such a person.
1. In what circumstances the Chief Justice or his designate can ignore the appointment procedure or the named arbitrator in the arbitration agreement to appoint an arbitrator of his choice.
On this issue, the Court inter alia noted as under:
- The court must first ensure that the terms of the agreement are adhered to or given effect to, as far as possible and those remedies, as provided for, are exhausted.
- It is not mandatory to appoint the named arbitrator but at the same time, due regard has to be given to the qualifications required by the agreement and other considerations. Referring the disputes to the named arbitrator shall be the rule. Ignoring the named arbitrator and nominating an independent arbitrator shall be the exception to the rule, which is to be resorted to for valid reasons.
Interestingly, the Court also proceeded to expound on the scope of Section 11 of the Act, which contains the scheme of appointment of arbitrators.
1. Whether the Respondent had taken the necessary steps for the appointment of an arbitrator in terms of the agreement, and the Appellant had failed to act in terms of the agreed procedure, by not referring the dispute to its Director, Marketing for arbitration.
On this issue, the Court inter alia noted as under:
- In view of the order dated January 20, 2006, the Respondent ought to have referred the dispute to the Director (Marketing) of the Appellant within two months from January 2006. The Respondent had not done so and in light thereof, it was the Respondent that had failed to act in terms of the agreed procedure and not the Appellant.
- As the Arbitrator was already identified, there was no need for the Respondent to ask the Appellant to act in accordance with the agreed procedure.
The Court proceeded to hold that the Chief Justice had erred in having proceeded on the basis that the Respondent had performed its duty under the agreement and that there was justification for appointment of an independent arbitrator.

The Court then proceeded to allow the appeal, set aside the impugned order and appointed the Director (Marketing) of the Appellant as the sole arbitrator to decide the disputes between the parties.

ANALYSIS:

By this decision, the Court has once again upheld that when a person enter into a contract with a government/statutory corporation/public sector enterprise having an arbitration agreement providing for settlement of disputes where the arbitrator will be one of its senior officers, such person cannot subsequently turn around and contend otherwise unless performance of that part of the arbitration agreement is impossible, or is void being contrary to the provisions of the Act. However, this position may differ where the person named as the arbitrator is an employee of a company/body/individual other than the state and its instrumentalities e.g. a Director of a private company who is party to the arbitration agreement.

Referring to its decision taken earlier in the matter of Northern Railway Administration, Ministry of Railway, New Delhi Vs. Patel Engineering Company Ltd. (please refer to our earlier hotline dated August 26, 2008) Court reiterated that it is important to first ensure that the terms of the arbitration agreement are adhered to or given effect to, as far as possible and those remedies, as provided for, are exhausted, before they intervene in any manner.

However, If circumstances exist, giving rise to justifiable doubts as to the independence and impartiality of the person nominated, or if other circumstances warrant appointment of an independent arbitrator by ignoring the procedure prescribed, the Chief Justice or his designate may, for reasons to be recorded ignore the designated arbitrator and appoint someone else.

FOOTNOTES

¹ Civil Appeal No. 5760 of 2009 arising out of SLP (C) No. 26906 of 2008.

² “69. Any dispute or a difference of any nature whatsoever or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this Agreement shall be referred to the sole arbitration of the Director, Marketing of the Corporation or of some officer of the Corporation who may be nominated by the Director Marketing. The dealer will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the contract related or that in the course of his duties or differences. ………………..It shall also be a term of this contract that no other person other than the Director, Marketing or a person nominated by such Director, marketing of the Corporation as aforesaid shall act as arbitrator hereunder…………………….”
Nishith Desai Associates 2022. All rights reserved.

Article By Sahil Kanuga and Vyapak Desai with Nishith Desai Associates.

For more articles on international law updates, visit the NLR Global section.

Brazil and India Act to Protect Employers and Employees During the COVID-19 Pandemic

The COVID-19 pandemic has altered the global workplace and international employer-employee relations in profound ways. As COVID-19 continues to spread, countries are enacting legislation and issuing guidance to support employers and employees as they confront the global crisis. In particular, Brazil, with a population of over 211 million, and India, with a population of approximately 1.3 billion, each has enacted measures to combat the ongoing economic and financial troubles caused by the COVID-19 pandemic.

Specifically, Brazil has issued federal provisional measures, including Provisional Measure No. 936 (“MP-936”) and Provisional Measure No. 927 (“MP-927”), to socialize the idea that employers may seek to reduce employees’ pay in exchange for greater job security. MP-936 provides for an Emergency Employment and Income Maintenance Program, including an Emergency Employment and Income Preservation Benefit (the “Benefit”), as well as policies for reducing salary and working hours and suspending employment agreements, and provisions for collective bargaining agreement (“CBAs”) meetings by virtual means. In particular, MP-936 and MP-927 provide for the following:

Salary and Hourly Reductions: MP-936 allows salary and hours reductions for up to a 90-day period. Each employee’s pay rate, hours and tenure must be preserved and reinstated upon the employee’s return to work. In the event of a reduction in salary and/or hours, the government is responsible for paying the Benefit. Employees who receive the Benefit still may receive unemployment insurance benefits. The amount of the Benefit that employees receive is based upon the amount of unemployment insurance to which they are entitled. For employees who earn less than R$3,135 or more than R$12,202.12 there is no obligation to have collective negotiations. There are various notice requirements for any salary and hours reduction, and an employer’s failure to comply may result in legal sanctions or fines. The presence of a CBA may provide for different reduction and notice requirements.
Suspension of Employment: MP-936 provides for suspension of employment agreements (e.g., furlough) for a period of up to 60 days, with the government paying a Benefit of 100% of the unemployment insurance to which employees are entitled. Employers are required to preserve employees’ current pay rate, hours and tenure, and employees are entitled to all employer-provided benefits. For employers who earned a gross revenue exceeding R$4,800,000 in 2019, the government will pay a Benefit of 70% of the employment insurance that employees are entitled to, provided that during the suspension period, employers pay to employeesfinancial support equal to 30% of employees’ salary. There are various notice requirements for any reduction. If employees work during a suspension, including engaging in any telework, then the suspension will be deemed not to have occurred, and legal sanctions and fines may be imposed upon employers. For employers whose income tax is calculated on the basis of actual income, financial support is deductible from the net revenue for purposes of calculating employers’ income tax. Note that redundancy terminations are considered terminations without cause, and employers have the sole discretion to determine selection criteria and severance packages.
Use of Accrued, Unused Paid Leave: MP-927 authorizes not only the use of accrued but unused paid leave, but also the use of holidays still being accrued, as well as holidays for which the accruing period has not even started.

India has imposed even broader employee protections that require employers to bear the heavy economic burden to support employees during the national lockdown. In response to the COVID-19 pandemic, the Indian government invoked special provisions of the Disaster Management Act, 2005 (the “DMA”) to implement a series of orders under the DMA (“Orders”) to impose a 21-day nationwide lockdown, effective March 25, 2020.

To counter the negative impact of the COVID-19 pandemic on India’s labor force, the Orders include strict directives for employers. The Orders prohibit employers from terminating any employees or contract labor during the lockdown, except for disciplinary reasons. In addition, the Orders bar employers from reducing employees’ wages. In addition, the Indian government has addressed the following issues that affect employers and employees:

Maintaining the Workforce: During the lockdown, employers should not reduce or stop salary payments or terminate employees. Similarly, employers may not reduce work hours and wages during the lockdown. Employers, however, may temporarily halt non-statutory benefits and postpone incentives until the business normalizes, provided that such measures adhere to employers’ internal policies, employee handbook provisions and/or employment agreements. In addition, employers may defer or suspend bonuses and annual increments for employees, subject to some narrow exceptions.
Paid Leave: Employers are prohibited from requiring employees to use paid time off during the lockdown. Employees, however, are entitled to use their accrued annual leave at their discretion, subject to internal policies. Employers cannot mandate that employees take unpaid leave.
Medical Checks: Employers may take steps to verify employees’ health, as long as such measures protect the health, safety and well-being of other employees. Such steps include, for example, requiring medical check-ups for employees who have travelled internationally. If employers pursue such measures, they must ensure that they have systems in place to ensure that employees’ medical records remain confidential and secure. Employers should be mindful not to discriminate against employees by selecting employees for medical checks based upon race or nationality.
Sick Time for Employees with COVID-19: Certain state governments have issued notifications/orders requiring employers to grant 28 days of paid leave to employees who have been infected with COVID-19. Employers may encourage, but not require, employees who have contracted COVID-19 to use their accrued sick leave. If necessary, employers may require COVID-19-positive employees to continue to take leave until such employees medically certify that they may return to work, during which time employers should continue to pay employees’ full wages and benefits.

ARTICLE BY Anastasia A. Regne of Epstein Becker & Green, P.C.

For more employment considerations amid the COVID-19 pandemic, see the National Law Review Coronavirus News section.

The Fairness for High-Skilled Workers Act May Endanger Economy

The Fairness for High-Skilled Workers Act has passed the House of Representatives, and is pending before the Senate where it may pass by unanimous consent (i.e., with no actual vote or hearing).

On its face, the Fairness Act seems fair. By eliminating the 7% per country cap, Indian nationals and Chinese nationals who have been waiting and would continue to wait for years to capture green cards would be placed at the front of line. But this would be at the expense of workers from other countries who are also important to the United States.

About 25% of all STEM workers in the U.S., including those in the fields of healthcare, physical science, computer, and math, are foreign-born and that figure is on the rise. One quarter of all doctors in the U.S. are foreign-born — many from sub-Saharan Africa — and are particularly important in poor, rural areas of the country where physicians are scarce. One in five pharmacists and one in four dentists are foreign-born. Other types of healthcare workers come from Asia, Mexico, Central America, and the Caribbean and our need for these workers rises as baby boomers age.

If the Fairness Act were to pass, recruiting from countries other than India and China might become more difficult, and this talent may well turn elsewhere. New Zealand, Ireland, Australia and the UK are also dependent on foreign-trained doctors.

High-tech workers from India and China are also important to the U.S. and its economy; but our current immigration system is driving them out as well. This started in 2008, when it became difficult for high-tech companies to get the number of H-1B visas they needed. That frustration has grown with the increased scrutiny of H-1B petitions and the long green card waiting lines. Indian and Chinese talent is heading for other countries, and Canada is welcoming them and their companies with open arms. South Africa, Argentina, India, Chile, Japan, Hong Kong, South Korea, Israel, Australia, and Ireland also are popular competitors.

Quotas of one kind or another have been part of the U.S. immigration system since the early part of the 20^th century. Literacy requirements limited immigration from some of the poorer countries of the world. Country-of-birth quotas benefited those from the UK, Ireland, and Germany at the expense even of those born in southern and eastern Europe. The 1965 Immigration and Nationality Act (the Hart-Celler Act), which is the basis of our current system, abolished national origin quotas (to eliminate discrimination) and focused on family reunification. The 7% annual ceiling on the number of immigrants from any one country was established. The ceiling was not meant to be quota, but rather a “barrier against monopolization.”

Senator Rand Paul, who opposes the Fairness Act, introduced the BELIEVE Act (Backlog Elimination, Legal Immigration and Employment Visa Enhancement Act) (S. 2091) on July 11, 2019. That bill would simply quadruple the number of employment-based visas by doubling the number available annually and exempting dependents from being counted toward the annual quota of visas. His bill also would exempt all shortage occupations from green card limits.

The Fairness Act may be just an interim solution. Rather than pitting family-based immigration against employment-based immigration and rather than pitting one country against another or one industry against another, perhaps it is time for legislation like the BELIEVE Act that would simply increase the number of green cards available to everybody.

ARTICLE BY William J. Manning of Jackson Lewis P.C.

For more on green card legislation, see the National Law Review Immigration law page.

State Department Makes Predictions about EB Cut-Off Date Movement

Notably, the State Department stated with certainty that the EB-2 Rest of the World category likely will retrogress in the coming months.

At a recent American Immigration Lawyers Association meeting, the US Department of State made comments about Employment-Based (EB) cut-off date movement in the final third of the fiscal year. This Immigration Alert summarizes the comments made by the State Department and what they could mean for EB cut-off date movement in the upcoming months.

EB-1: China and India

US Citizenship and Immigration Services announced that the “final action date” of January 1, 2012 will control for the China and India EB-1 categories. These have apparently exhausted close to 50% of the entire EB-1 limit for the 2017 fiscal year. This cut-off date is expected to be maintained until the end of September, when the fiscal year ends. The final action cut-off date for the China and India EB-1 categories may once again become current at the start of the new fiscal year on October 1, 2017, but there is no guarantee that this will happen.

EB-1: Rest of the World

The EB-1 Rest of the World category (i.e., countries other than China, India, Mexico, the Philippines, El Salvador, Guatemala, and Honduras) should remain current for the foreseeable future.

EB-2: India

A slight advancement in the EB-2 India category will occur in June, but it is unlikely that this category will once again reach the most advanced final action cut-off date that was reached last year. The State Department stated that it may maintain the existing final action date through the end of September, but there is no guarantee that this will occur.

EB-2: China

EB-2 China will advance by less than one month to March 1, 2013 in June. The State Department noted that the EB-2 China category should continue to advance slowly and will probably exhaust its per-country limit before the end of the year.

EB-3: China

EB-3 China’s final action date of October 1, 2014 will continue to apply in June. As a result of a significant EB-3 downgrade volume, retrogression in this category is possible in the final months of the fiscal year.

EB-2: Worldwide

The State Department noted that the EB-2 category has experienced significant usage, and stated with certainty that a final action cut-off date will be imposed for the EB-2 Rest of the World category in August—or even as early as July. This cut-off date, once imposed, should remain unchanged through the end of September, with a small advancement possible in September and a return to currency in October.

EB-3: Rest of the World

The EB-3 Rest of the World category will move forward by one month in June to April 15, 2017. The State Department expects further forward movement in this category for the rest of the fiscal year.

EB-3: India

The State Department noted that the EB-3 India category will advance in June from March 25, 2005 to May 15, 2005. Continued forward movement is expected in July and August. The State Department predicts that the July cut-off date for the EB-3 India category will advance to October 15, 2005.

How This Affects You

It is highly likely that the cut-off date movement predicted by the State Department will occur. Persons seeking permanent residence through the EB process should take note of this predicted movement and plan accordingly. In particular, persons in the EB-2 Rest of the World category may wish to consider filing adjustment of status applications before the anticipated retrogression in this category occurs in July or August. Once this retrogression occurs, only persons with priority dates before the new cut-off date will be able to file such applications.

This post was written by A. James Vázquez-Azpiri of Morgan, Lewis & Bockius LLP.

November Visa Bulletin Confirms Fears of Significant Retrogression for EB-2 India

The Department of State released its November Visa Bulletin today. It is a mixture of good news and really bad news. The good news is that the EB-2 and EB-3 categories for all countries, except for India, continue to experience forward movement. Worldwide, EB-2 availability remains current and EB-3 availability advanced to June 1, 2012. China also experienced forward movement, with EB-2 advancing to December 8, 2009, and EB-3 advancing to January 1, 2010.

The really bad news in the Visa Bulletin relates to visa availability for India. As expected, EB-2 availability for India retrogressed by more than four years, from May 1, 2009, to February 15, 2005. EB-3, however, advanced by one week to November 22, 2003.

The Visa Bulletin also contains projections for future months. Visa availability in the EB-1 (all countries) and EB-2 (worldwide) categories are expected to remain current over the coming months. EB-3 worldwide availability is expected to experience rapid forward movement for the next several months. For China, EB-2 availability is projected to increase by three to five weeks per month, and rapid forward movement is also expected in the EB-3 category, with potential retrogression in February. India is not expected to have any forward movement in the EB-2 or EB-3 categories.

In short, individuals from India face a bleak outlook in green card availability over the next few months, while the future is brighter for individuals from all other countries.

EB Category	Worldwide	China	India
EB-1	Current	Current	Current
EB-2	Current	12/08/2009	02/15/2005
EB-3	06/01/2012	01/01/2010	11/22/2003

ARTICLE BY

Scott T. Decker

Greenberg Traurig, LLP

Department of State Releases October 2012 Visa Bulletin

The National Law Review recently published an article, Department of State Releases October 2012 Visa Bulletin, written by Eleanor Pelta, Eric S. Bord, A. James Vázquez-Azpiri, Lance Director Nagel, Lisa H. Barton, and Malcolm K. Goeschl of Morgan, Lewis & Bockius LLP:

EB-2 category for China and India is no longer unavailable; cutoff dates remain for Rest of the World EB-2 category.

The U.S. Department of State (DOS) has released its October 2012 Visa Bulletin. The Visa Bulletin sets out per country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their status to that of permanent resident or to obtain approval of an immigrant visa application at a U.S. embassy or consulate abroad, provided that their priority dates are prior to the cutoff dates specified by the DOS.

What Does the October 2012 Visa Bulletin Say?

EB-1: All EB-1 categories remain current.

EB-2: A cutoff date of January 1, 2012, has been imposed for foreign nationals in the EB-2 category from all countries except China and India; a cutoff date of July 15, 2007, has been imposed for foreign nationals in the EB-2 category from China; a cutoff date of September 1, 2004, has been imposed for foreign nationals in the EB-2 category from India.

EB-3: There is continued backlog in the EB-3 category.

The relevant priority date cutoffs for foreign nationals in the EB-3 category are as follows:

China: February 8, 2006 (forward movement of 139 days)
India: October 15, 2002 (forward movement of 23 days)
Mexico: October 22, 2006 (forward movement of 92 days)
Philippines: August 1, 2006 (forward movement of 54 days)
Rest of the World: October 22, 2006 (forward movement of 92 days)

Developments Affecting the EB-2 Employment-Based Category

MEXICO, THE PHILIPPINES, AND THE REST OF THE WORLD

In July, for the first time in many years, the DOS imposed a cutoff date for individuals who qualify for the EB-2 category and are chargeable to a country other than China or India (Mexico, the Philippines, and the Rest of the World). Since July, the cutoff date for individuals from these countries had been January 1, 2009. The October Visa Bulletin announced that, as of October 1, 2012, the cutoff date will move forward to January 1, 2012. This means that, beginning on October 1, 2012, an individual chargeable to Mexico, the Philippines, or the Rest of the World with a priority date before January 1, 2012, may file an AOS application or an immigrant visa application. It is expected that the DOS will remove cutoff dates for these countries completely in November and that the EB-2 category will be “current” for individuals chargeable to these countries.

INDIA AND CHINA

The October Bulletin indicates a cutoff date of September 1, 2004, for EB-2 individuals chargeable to India and a cutoff date of July 15, 2007, for EB-2 individuals chargeable to China. The EB-2 category was previously unavailable to individuals chargeable to India or China. This means that EB-2 individuals chargeable to India or China with a priority date preceding these respective dates may file an AOS application or have the application approved on or after October 1 of this year. It appears that the U.S. Citizenship and Immigration Services has a large number of AOS applications for EB-2 Indian and Chinese nationals that have been “preadjudicated” and will be approved on October 1.

How This Affects You

Priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Cutoff dates can move forward or backward or remain static and unchanged. Employers and employees should take the immigrant visa backlogs into account in their long-term planning and take measures to mitigate their effects. To see the October 2012 Visa Bulletin in its entirety, please visit the DOS website here.

Tag: india

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