India, Aug. 5 -- Australia is changing the way it processes skilled migration applications, giving priority to temporary visa holders already living and working in the country over applicants applying from overseas. While the move is aimed at reducing net overseas migration, it could reshape the pathway to permanent residency for thousands of Indian students.

Home Affairs Minister Tony Burke last week issued a new ministerial direction that changes the order in which skilled visa applications are processed, according to a report by ABC News. Under the revised priorities, migrants already in Australia on temporary visas will move to the front of the queue for permanent residency, while new offshore applicants are expected to wait longer....