On 19th September, the US president Donald Trump dropped a new bombshell. He ordered that all new petitions for H-1B visas filed on behalf of workers outside America would now carry a US$100,000 fee. The measure, which will last for a year unless renewed, is aimed at deterring firms from sponsoring foreign workers, particularly in entry-level roles. Its immediate impact will fall disproportionately on Indians, who account for roughly three-quarters of all H-1B recipients.
Under the H-1B system, firms petition the government for the right to hire foreign workers in specialty occupations, often in technology or engineering. Outsourcing giants such as Infosys, TCS, Wipro and HCL, long reliant on sending junior engineers to America, are likely to be hit.
By contrast, firms may still pay up for specialists in fields such as artificial intelligence, chip design, biotechnology or cybersecurity, where domestic talent is scarce and salaries high enough to justify the cost. The new fee reshapes mobility for a substantial slice of India’s professional diaspora.
All these months, president Trump’s trade negotiations have focused on merchandise exports, making export-oriented countries like China, Japan, South Korea, Taiwan and Vietnam particularly vulnerable. To escape disaster, they quickly struck deals with him, some promising impossibly large investments and jobs. India refused to either give in, or make false promises to mollify him, probably because it thought it had less to lose.
But India is more vulnerable than others: software exports and remittances from abroad, mainly the US, are lifesavers for the perennially weak Indian rupee. Without these two, economic growth will be hit noticeably. Trump has gently twisted India’s arm with the new H-1B fee. He can do more harm, including imposing a remittance tax.
The White House argues that the H-1B programme is being abused. The order accuses US companies (without naming them) of laying off Americans while hiring foreigners at lower wages with specific details. Microsoft, Intel, Amazon and Salesforce are possibly the culprits that have approved thousands of H-1Bs even while cutting tens of thousands of domestic jobs. American firms plead for access to foreign talent even as they dismiss local workers, creating the perception of a programme skewed in favour of cost savings over skill.
Will It Last? Hope It Does
The market will suffer a knee-jerk reaction on Monday and tech stocks may possibly drift lower but will this restriction last, and if it does, will it turn out to be positive for India after all? First, there will be a pushback from within the US.
At one stroke, Silicon Valley has lost its pipeline of talent. In 2023, around 65% of H-1B visas were for 'computer related' roles (software engineers, systems analysts, etc). Top sponsors of H-1B visas are Amazon, Google, Microsoft, Meta, Apple and also large Indian firms operating in the US such as Tata Consultancy Services. Start-ups, hospitals, research labs and financial services firms also rely heavily on H-1B workers.
The surcharge will raise costs, discourage new hires and slow the on-boarding of talent for projects that require scarce skills. High-tech innovation may slow if the pipeline from abroad dries up. Finally, litigation is likely; it is possible that US courts may strike down or amend the measure.
Paradoxically enough, if the restriction lasts, however, it may actually benefit India. Multinationals are already investing in global capability centres (GCCs) in India to tap talent without the hassle of immigration. India hosts roughly 1,700 GCCs, employing 1.9mn (million) people and generating US$64.6bn (billion) in export revenue last year. By 2030, some estimates suggest India could host over 2,400 GCCs employing close to 3mn.
President Trump’s fee may accelerate that trend. Firms that previously sent employees to America may find it cheaper and simpler to expand offshore centres instead, keeping talent at home while retaining access to global projects.
The impact on India could go beyond numbers. With more skilled engineers, data scientists and product managers remaining in-country, the local talent pool will deepen. Companies are likely to spread operations beyond tier-1 cities, into places such as Coimbatore, Kochi, Ahmedabad, Jaipur and Bhubaneswar, tapping underutilised talent. Indian centres may increasingly take on higher-value tasks—R&D, design, product management—rather than just coding or data entry. India’s role as a global 'talent hub' will consolidate further.
In effect, president Trump may think he is hobbling India. In reality, he is nudging it toward a more robust, self-reliant, and globally integrated model. The H-1B fee is both a thorn and a stimulus: costly for American firms reliant on imported labour, inconvenient for Indian workers dreaming of Silicon Valley, but potentially a boon for India’s domestic economy. The unintended consequences of Trump’s protectionism may turn out to be more generous than its intent.
(This article first appeared in Business Standard newspaper)
The problem is with the mindset. And that is unique to an individual. Not all are risk averse. Had it been so, how so many startups are in India? Many are failure, and many are more than success. The issue is the 'chalta hai' attitude to the corrupt and the hostile. Instead of looking down at them, many look up at them and try to imitate. But slowly, and surely, the things are changing. But may used to the corrupt ways are uncomfortable with this change. WE must thank US to make us realise that self-help is the best. Atmanirbhar is the mantra today, notwithstanding what the so called pandits try to teach us.
There’s another quiet force in Uncle Sam’s toolkit—withholding tax—which can be levied on outsourced work. It’s a reminder that we shouldn’t take U.S. policy lightly, especially when it comes to cross-border business.
And perhaps we should temper our ambitions of building the next Meta or Amazon in India. The challenge isn’t just infrastructure or capital—it’s cultural. In our society, failure often carries a lasting stigma. Once someone stumbles, it’s as if an invisible mark follows them forever. In contrast, the U.S. embraces failure as part of the journey, not the end of it.
Take, for instance, the decision by Mr. Narayana Murthy to donate funds to OpenAI when AI was still in its infancy. While generous, one might wonder—why not invest and take a stake? Or better yet, why not nurture a similar initiative here in India? The answer may lie in our collective discomfort with risk. We tend to avoid ventures that might fail, and that hesitation limits our potential.
It’s not a lack of talent or vision—it’s a mindset issue. Until we normalize failure as a stepping stone rather than a scar, we may continue to watch innovation flourish elsewhere.
and social security, reservation, corruption etc etc are cherries on the cake.
Look at the glass as half full rather than other way. Why can we not retain the best brains and develop Indian companies to compete with Google, amazon, Microsoft and the likes. Those who are remitting currently will transfer their residence and bring enough dollars of savings to take care of all the issues mentioned.
Every day several thousand of dollars transferred to India by migrants to help their family members to spent on day today expenses, educational/health care issues, real estate purchase etc etc will be drastically reduced due to Trump drastic measures to exploitation by the migrants in general. Modi Swadeshi/protectionist policies/mindset responsible other global leaders to follow such in their nations. Tit for tat policy. Russia noway useful for foreign remittances.
India must stop wasting time and resources to deal with US. Ignoring POTUS is the best strategy. It worked in the past and will always work with bullies like the current POTUS.
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And perhaps we should temper our ambitions of building the next Meta or Amazon in India. The challenge isn’t just infrastructure or capital—it’s cultural. In our society, failure often carries a lasting stigma. Once someone stumbles, it’s as if an invisible mark follows them forever. In contrast, the U.S. embraces failure as part of the journey, not the end of it.
Take, for instance, the decision by Mr. Narayana Murthy to donate funds to OpenAI when AI was still in its infancy. While generous, one might wonder—why not invest and take a stake? Or better yet, why not nurture a similar initiative here in India? The answer may lie in our collective discomfort with risk. We tend to avoid ventures that might fail, and that hesitation limits our potential.
It’s not a lack of talent or vision—it’s a mindset issue. Until we normalize failure as a stepping stone rather than a scar, we may continue to watch innovation flourish elsewhere.
and social security, reservation, corruption etc etc are cherries on the cake.