Trump has ordered a review of the US visa programme for bringing high-skilled foreign workers into the United States, putting technology firms and the outsourcing companies that serve them on notice of possible changes ahead.
The review threatens Indian IT services firm such as Infosys Ltd and Tata Consultancy Services which advise large companies on tech issues and carry out a range of tasks for them, relying heavily on the H-1B visa programme.
“The H-1B visa issue will be one of the issues on the table during the PM’s visit,” Trade Secretary Rita Teaotia told reporters.
Modi will meet Trump in Washington on June 26.
The first meeting between them is expected to lay the ground for a further expansion in ties, which grew rapidly under former US president Barack Obama.
However, Trump’s focus on building ties with China, coupled with his protectionist trade policies and his characterisation of India as an unscrupulous negotiator in the Paris climate change agreement have raised concern in New Delhi about a drift in relations.
Aside from the visa review, the Trump administration has launched an investigation of countries including India with which the United States runs a bilateral trade deficit.
Teaotia said the government would try to convince Washington that higher exports from India were a win-win for both countries as they helped American companies cut costs and create jobs.
The bilateral trade between the two countries more than doubled to about $115bn in 2016 from $45.1bn in 2006.
However, the US trade deficit with India also widened. The trade shortfall was $30.8bn in 2016, up from $12.7bn in 2006.
Meanwhile, a group of US lawmakers has backed medical device makers by urging India to reconsider its decision to cap prices of heart stents, raising the issue ahead of Modi’s visit.
In a letter sent to the Indian ambassador to Washington last month, 18 members of Congress said they were “troubled” by the price cap, warning that it could deter firms from launching new medical products in India.
Modi’s government has in recent years capped prices of hundreds of life-saving drugs to make them more affordable.
And in February, it imposed a 75% price cut for certain heart stents - wire mesh tubes used to treat blocked arteries.
The government justified its action by citing “huge unethical markups”.
But global medical device makers have protested the new cap, with some saying it would force them to sell below cost.
The US lawmakers warned that people would be denied access to the latest medical advances if companies backed away from India’s $5bn medical-technology market.
“The sudden and unprecedented nature of the decision threatens citizens’ access to the newest and most innovative medical technologies and raises strong concerns about the business environment in India,” they said in the May 22 letter.
The Indian embassy in Washington did not respond to a request for comment.
The US Department of Commerce is likely to raise the issue with Modi during his visit, according to an industry source aware of the plans.
“It’s one of the biggest pain points,” the source said.