Announcing a sweeping overhaul of the H-1B visa system that, effectively, targets skilled Indians more than any other group, US President Donald Trump signed a proclamation Friday that will raise the fee for these visas to $100,000 (Rs 88 lakh) annually—making it prohibitively expensive for companies to hire Indian professionals in the US.
Currently, the H-1B visa fee ranges from about $2,000-$5,000 depending on employer size and other costs. The visas are valid for three years and can be renewed for another three years. Companies pay to sponsor H-1B applicants.
India-born professionals are the biggest beneficiaries of these visas. Between October 2022 and September 2023, 72% of the nearly 4 lakh visas issued under the H-1B programme went to Indian nationals. During the same period, top four Indian IT majors with a presence in the US—Infosys, TCS, HCL, and Wipro—obtained approval for around 20,000 employees to work on H-1B visas, as per the latest US Citizenship and Immigration Services (USCIS) data.
A senior US administration official clarified that the new fee targets only new H-1B visa petitions, and not existing holders or renewals. As per the official, individuals currently holding H-1B visas, including those visiting India or abroad, don’t need to rush back to the US before Sunday or pay the steep $100,000 fee.
With September 21 specified as the deadline for this to come into effect, a wave of panic and uncertainty had gripped many.
Panic among workers, Industry prepares for fallout
There were reports that H-1B visa holders or their family members currently outside the US for work or vacation are scrambling to return within the next 24 hours or risk being stranded and denied entry.
Experts have described the move as a body blow to Indian IT services companies, warning it will accelerate near-shoring, offshoring and sharply raise costs of onshore delivery in the US. The sudden hike is expected to squeeze margins and force fundamental shifts in delivery models for the country’s largest software exporters.
Former Infosys executive Mohandas Pai said the measure would “dampen fresh applications” and make it impossible for firms to sustain their current visa intake. “Now what will happen is everybody will work to increase offshoring…because it doesn’t make sense, first, you don’t get talent, second the costs are too high. That will happen over the next maybe six months to one year,” he said, adding that while existing visas remain unaffected, the programme for new applicants has been rendered economically unviable.
Nasscom warning against the wider implications
Industry body Nasscom warned of ripple effects not just for Indian IT but also for America’s own technology ecosystem. “Adjustments of this nature can potentially have ripple effects on America’s innovation ecosystem and the wider job economy. It will also impact Indian nationals that are on H-1B visas working for global and Indian companies,” it said, flagging the lack of transition time as a major risk for projects and professionals alike.
Nasscom underlined that Indian companies already comply with prevailing wage norms, invest in local communities and have reduced dependence on visas in recent years. High-skill talent, it argued, is central to sustaining American competitiveness at a time when AI and frontier technologies are redefining global leadership.
CP Gurnani, co-founder and vice chairman, AIonOS, stressed that Indian IT had seen this coming. “Over the past several years, Indian IT firms have significantly reduced their reliance on the H-1B visa, with filings dropping by over 50%. This shift is a result of our ongoing strategy to hire more locally, invest in automation and enhance our global delivery models. While visa fees may change, the impact on our business will be minimal, as we’ve already adapted to this evolving landscape,” he said.
India’s largest IT firm, Tata Consultancy Services, has similarly maintained that it has cut visa reliance by scaling up local hiring, including fresher recruitment from American universities.
Pai rejected the notion that companies were using the visas to dump cheap labour into the US, noting that average salaries paid by top H-1B employers exceeded $100,000. “People pay more than $100,000 as salaries, they’re not cheap. If they pay their staff $100,000 they charge their clients $150,000-160,000 so all this idea of sending cheap, low-skilled people, that doesn’t hold water,” he said.
Infosys and Wipro’s US-listed shares slipped overnight after President Donald Trump signed the order. While Infosys’ ADR fell 4%, Wipro’s declined 2% on Friday.
For now, industry watchers expect companies to protect existing client contracts by shifting more work to India while stepping up US hiring where feasible. But the sharp escalation in visa costs, combined with the absence of a transition window, signals a near-term freeze on new applications and an inevitable tilt towards offshore delivery. The longer-term risk, experts warn, is that the US itself may lose its edge in innovation as global talent looks elsewhere.
Justifying its move, the US order claimed there was “deliberate” exploitation of the visa scheme by companies to “replace, rather than supplement, American workers with lower-paid, lower-skilled labour.” This, the order said, had undermined economic and national security and led to a “disadvantageous labour market for American citizens, while at the same time making it more difficult to attract and retain the highest skilled subset of temporary workers, with the largest impact seen in critical science, technology, engineering, and math (STEM) fields.”
The number of foreign STEM workers in the US has more than doubled between 2000 and 2019, increasing from 1.2 million to almost 2.5 million, while overall STEM employment has only increased 44.5% during that time, the order said.
Among computer and math occupations, the foreign share of the workforce grew from 17.7% in 2000 to 26.1% in 2019. “The key facilitator for this influx of foreign STEM labour has been the abuse of the H-1B visa,” it said.
The order alleged that information technology (IT) firms have “prominently manipulated” the H-1B system, significantly harming American workers in computer-related fields. It said that the share of IT workers in the H-1B programme grew from 32% in 2003 to an average of over 65% in the last five fiscal years. In addition, some of the most prolific H-1B employers are now consistently IT outsourcing companies.
“Using these H-1B-reliant IT outsourcing companies provides significant savings for employers: one study of tech workers showed a 36% discount for H-1B “entry-level” positions as compared to full-time, traditional workers. To take advantage of artificially low labour costs incentivised by the programme, companies close their IT divisions, fire their American staff, and outsource IT jobs to lower-paid foreign workers.”
White House defends the decision
White House staff secretary Will Scharf said the H-1B programme is supposed to allow highly skilled labourers, who work in fields that Americans don’t work in, to come into the US.
The Trump administration said that the $100,000 fee is aimed at ensuring that the people being brought into the country are “actually very highly skilled” and do not replace American workers.
The move is aimed at protecting American workers while ensuring that companies have a pathway to hire “truly extraordinary people” and bring them to the United States.
“We need workers. We need workers. We need great workers, and this pretty much ensures that that’s what’s going to happen,” Trump said, as he signed the proclamation in the Oval Office in the presence of commerce secretary Howard Lutnick.
Lutnick said historically, the employment-based Green Card programme let in 281,000 people a year, and those people earned $66,000 a year on average, and were five times more likely to participate in assistance programmes of the government.
“So we were taking in the bottom quartile, below the average American. It was illogical, the only country in the world that was taking in the bottom quartile,” Lutnick said.
“We are going to stop doing that. We’re going to only take extraordinary people at the very top, instead of those trying to take jobs from Americans. They’re going to create businesses and create jobs for Americans. And this programme will raise more than $100 billion for the treasury of the United States,” he added.
The US order said that the abuse of the H-1B programme is also a “national security threat”, as it said that domestic law enforcement agencies have identified and investigated H-1B-reliant outsourcing companies for engaging in visa fraud, conspiracy to launder money and other illicit activities to encourage foreign workers to come to the United States.
Trump said that the country will use that amount to cut taxes and pare down debt. “We think it’s going to be very successful,” Trump said.
Trump said that the tech companies “love it. They really love it. They really love it. They need it”. “The main thing is, we’re going to have great people coming in.”
On whether the technology CEOs, who hire foreign workers on H1-B visas, are concerned about the new move, Trump said: “Everyone’s going to be happy. And we’re going to be able to keep people in our country that are going to be very productive people. And in many cases, these companies are going to pay a lot of money for that, and they’re very happy about it.”
Trump also signed an executive order entitled ‘The Gold Card’, aimed at setting up a new visa pathway for foreigners of extraordinary ability who are committed to supporting the United States.
Under the Gold Card programme, individuals who can pay $1 million to the US Treasury, or $2 million if a corporation is sponsoring them, will get access to expedited visa treatment and a path to a Green Card in the country.
When asked if the $100,000-fee will apply to H-1B visa holders already in the country, to renewals or to those applying for the first time from abroad, Lutnick said, “Renewals, first times, the company needs to decide. Is that person valuable enough to have $100,000 a year payment to the government, or they should head home and they should go hire an American. It can be a total of six years, so $100,000 a year. So either the person is very valuable to the company and America, or they’re going to depart and the company is going to hire an American. That’s the point of immigration: hire Americans and make sure the people coming in are the top, top people. Stop the nonsense of letting people just come into this country on these visas that were given away for free. The president is crystal clear. Valuable people only for America. Stop the nonsense.”