Government's 457 visa scrapping could affect India trade negotiations

India has hinted that the Australian Federal Government's decision to replace the 457 skilled worker visa may affect trade negotiations.

The Federal Government announced it would abolish the 457 visa and replace it with two new visas, with Prime Minister Malcolm Turnbull saying the new system would be "manifestly, rigorously, resolutely conducted in the national interest".

The move looks set to damage Mr Turnbull's recent attempt to restart stalled talks on a free trade deal with India.

Indians make up a quarter of 457 visa holders, the most of any nation.

India had been seeking an expansion of approved skill categories — essentially to allow more Indian professionals to work in Australia.

In response to the Government's changes, India's Ministry of External Affairs issued a terse statement, saying that it was "examining the consequences" of the new policy, adding that it would look at the matter "in the context" of trade negotiations.

The Government's announcement follows a crackdown on 457 visas last month, when Immigration Minister Peter Dutton said the Government would scrap the fast-track arrangements in place for 457 skilled work visas for fast food chains.

But one Indian migration agent is warning the changes will harm Australia's longer-term ability to attract both skilled workers and students with an eye to their futures.

Anisha Gupta is a migration agent, and yesterday her phone ran hot.

"I'm receiving a lot of calls from the applicants, as well as the people who have already applied for the visa — how will that affect them?" she said.

Current visa holders will not be affected by the changes, which will see the introduction of two new temporary skills visas — a two-year visa and a more specialised one for four years "targeted at higher skills".

Australia going down the same line as the US

Ms Gupta warns changing the visa system will likely hurt Australian universities' efforts to attract Indian students, especially those seeking degrees in the 200 professions the Government is removing from the list of those eligible for skilled worker visas.

"That would affect the students if they think their occupations are out of the list, so they might choose another country which has a more favourable immigration policy for them," she said.

US President Donald Trump has said he will abolish or restrict America's skilled worker program — also very popular with Indian tech workers.

Silicon Valley says that will harm America's ability to attract the best and brightest, but does the same argument apply for Australia?

"Australia's going on the same line as the US, now there's uncertainty in the minds of people, so it gives a bad name in the minds of people aspiring to make Australia their home country because you can never rely on the immigration policy," Ms Gupta said.

Ms Gupta, herself an Australian citizen, says Indians taking 457 visas are mostly hired to work as cooks and software developers or programmers.

Government figures show nearly 10 per cent of 457 visas granted last year were for those roles.

Ms Gupta says she understands why the Government wants to put Australians first, but warns Indians will view Australia as less welcoming.

"Maybe somewhere like Canada will benefit from the changes Australia and the US are making," she said.