In the short term, somewhat of a negative effect. There might be a bit more employment for the locals that will negate the effect of closure of many companies.
In the long term, US will lose a lot if it kicks out immigration. The majority of great American companies have had first or second generation immigrants as their founders. See examples below.
Here are a few ways the US will lose if it kicks off all Indians:
- India is a big purchaser of US defense, aerospace and tech equipment. Many of those government deals will be aborted. Besides local companies, the French, British, Israeli and Russian companies will gain. These companies could then get enough scale to push out the American companies like Boeing, Caterpillar, Lockheed, Raytheon, GE etc in some markets.
- The Indians who go back to India will know enough about US markets and the global markets, carrying expertise from the places they worked. Using this expertise, some could start more companies in India that can then directly compete with the parent US companies they worked with. That could cut into the markets of many US companies both abroad and at home.
- The US companies that rely on the cost arbitrage from the visa labour either have to offshore a lot of work or just lose the cost advantage to Asian & European companies. In either case, a lot of of tax revenues & jobs lost.
- The tens/hundreds of billions of dollars that the Indian Americans have saved in homes, stocks, banks and companies will have to be directly remitted to India and this wealth can go into creating a lot of new companies.
- As US closes to immigration, the SF cluster would lose the economies of scale when it comes to creating new ideas and the next line of technology companies would form around some other cluster. Maybe London [unless UKIP does a similar thing there] or Tel Aviv or Shanghai or Bangalore. That would leave US with less of a say in how the future of technology proceeds.
At this stage, India will be a big gainer if its expat Indians return home. While there will be a short term pain from the loss of some high paying jobs from the locals and medium term pain due to the loss in remittance flow, in the long term India could significantly gain from their global expertise.
This is highly unlikely to happen.
The question is simplistic as well. Some background :
- What led to the decision? What was the context?
- Are Indians on H1B being asked to leave without notice? Or are new Indians not being admitted?
- What about those Indians studying in colleges? There is a large contingent of them studying masters in the US
- What about green card holders and citizens? Are they being asked to leave?
Most Indians who are here are legal migrants. A large number of them are green card holders or citizens too. Many of them are first generation and there are some second generation ones too. A large student contingent. Indian Americans are among the highest earning as an ethnicity and are considered law abiding.
There are only two negative things about Indians in the US:
- Outsourcing : Lots of jobs have been “bangalored” for decades. This has left many Americans fuming and angry at Indians in general.
- Abuse of H1-B. There are many Indian companies who are supposed to have leveraged legal loop holes to bring techies here who would work for longer hours and for lesser money.
To throw out Indians would mean denying American companies access to a large pool of resources who eventually make up about 18% of the worlds population.
Repercussions of such a move not only depend on the decision but on the implementation of the decision:
- How are the Indians being transported back? In giant ships? There are over 3 million of them. By force? Asked to be evacuated by the Indian forces?
- What happens to their property?
- Are some going to be held in some kind of temporary zones?
- Did the government consult or inform companies to soften the impact?
- What happens to outsourcing? All the customer support call centers, for example? Manufacturing entities?
The decision, leave alone the implementation would result in the rest of the world being up in arms. How would Chinese Americans, Japanese Americans and everybody else who isn’t white react? They all would likely try and leave. This would result in pandemonium of the highest order.
Among the repercussions:
- A legal crisis. Liberals and even a large number of conservatives would consider this on par with the Chinese Exclusion Act or the Japanese internment during world war 2.
- Courts are likely to provide temporary reprieve. Uncertainty drives up ticket prices to India.
- Law and order situation would worsen. This is inspite of Indians being a small % of the population. This is a “representative” decision.
- Colleges would go empty as students have “lesser” roots compared to those who work. Entire courses would be empty. Students would scoot as soon as they can. Universities would suffer for at least five years.
- Pandemonium breaks out in companies as Indians stop turning up for work from Google to McD’s. Companies are still figuring out what to do. Service suffers in the interim.
- Markets the world over would tank. From NY to Mumbai, temporary halt in trading as markets have hit a lower circuit.
- Remittance to India shoots up. Not sure if this would do anything to US banks, the impact would be get but nothing like a bank run. Loans are likely written off en Masse.
- A large number of Indians (typically concentrated in suburbs of large cities) start putting their houses on the market. No telling what this does to the housing market.
- Airports and even sea ports reeling as people try to start leaving as soon as possible. Countries in Europe scramble to accept Indians in – at least temporarily in their airports so that they can go back home. Indian navy scrambles and repurposed merchant ships to get people back to India. Modi puts himself in charge of the emergency operations.
- Indian IT companies are reeling as their books of business are out of whack. They aren’t sure what is going to happen to their billion dollar contracts with private and government entities in the US.
- US companies start opening up large scale offices in Canada, Europe and Australia to start accommodating Indians who’ve reached there.
- Companies scramble as there is a good amount of skill shortage that Americans simply cannot fill at the moment.
- Indian government tries to react to the job situation, for those returning and for those out of work in urban centers. Public sector jobs likely to increase to absorb people.
- Countries the world feel insecure and start a massive arms build up. Sea Trade routes in the Indian Ocean are blocked as India and the US face tense moments.
There would be a thousand other repercussions, I just had to stop somewhere. Every country would look the US with suspicion after that – making the entire world a very very insecure place to live in.