After targeting Indian exports with 50% tariffs, US President Donald Trump has now chosen to strike at the heart of India’s global economic presence—its people. His latest executive order, imposing a one-time payment of $100,000 on every new H-1B visa application from the current $2,000-5,000, is not just a policy shift but a symbolic breach of the open and opportunity-rich America that for decades powered its innovation engine by welcoming talent from every continent. For Indian professionals and the economy at large, it is a move that stings quite badly as India has held a commanding share of these visas for years, with nearly three-quarters of H-1Bs going to Indians according to the latest data. This clampdown comes at a time when the US itself is grappling with talent crunch in science, technology, and medicine, gaps that have consistently been filled by the very foreign experts it now seeks to keep out.
Immediate Impact on Indian IT and Tech Services
The numbers illustrate the relationship. In FY25 alone, Amazon had more than 10,000 H-1B approvals, with Tata Consultancy Services close behind, followed by Microsoft, Meta, and Google. Barring TCS, these are all major US technology and innovation giants that dominate global tech, and that rely on H-1B talent, mostly sourced from India, to power their product launches, and new research. Trump’s rhetoric may be about protecting American jobs, but in reality, the H-1B fee hike hits hardest at the ambitions of US-based firms that depend on global skill mobility to remain competitive. The move signals the closing of what has long been the world’s premier magnet for global talent, a system that transformed the US into the hub of the digital revolution.
For Indian information technology (IT) and tech services, the immediate effect will be disruption. Nasscom has warned of an impact on business continuity for onshore projects, a chilling of new applications, and a scramble to adapt as the cost of sending staff to the US skyrockets. Over the years, Indian companies have reduced dependency on US visas, pivoting to greater local hiring and expanded offshore delivery in Indian cities. Yet the sudden and steep hike cannot but slow down cross-border exchanges. But the cut runs both ways. The H-1B programme, contrary to the political spin, has never simply been a tool for importing cheap labour; a large number of H1-B holders earn six-figure salaries and pay US taxes while driving innovation in critical sectors. By raising the barrier to entry this high, Trump risks engineering a reversal of roles as US firms may increasingly look to locate new labs, R&D bases, and offshore development centres outside the US—India included—to tap the world-class talent now denied entry. The new realpolitik could push Indian IT to accelerate its move up the value chain, growing India’s own innovation hubs.
Long-Term Implications: Brain Gain or Reality Check?
While some Indian business and government leaders have put a positive spin on the situation, talking up concepts like “brain gain” and arguing that returning professionals can transform India’s start-up and tech ecosystem, such hopes are, at best, realisable only in the very long term. The infrastructure, access to venture capital, and entrepreneurial culture that made the US the default destination for dreamers cannot be conjured up overnight. For now, the reality is that the pain of Trump’s move lands both ways. Indian workers see the American dream receding further away, and American companies at the cutting edge of global product and tech development face a self-inflicted wound.