‘Disruptive impact’: India in first response to US H-1B visa fee hike

In its first response to the move unveiled by the Trump administration on Friday, the external affairs ministry said the full implications of the measure are being studied by the government and other stakeholders, including Indian industry. The development came against the backdrop of a partial thaw in India-US relations, which were strained in recent months by President Donald Trump’s imposition of 50% tariffs on Indian goods, including a punitive levy over Russian oil purchases.

Referring to the Trump administration’s proposed restrictions on the US H-1B visa programme, the external affairs ministry said in a statement: “This measure is likely to have humanitarian consequences by way of the disruption caused for families. Government hopes that these disruptions can be addressed suitably by the US authorities.”

Industry in India and the US has a stake in innovation and creativity, and “can be expected to consult on the best path forward”, the ministry suggested as a possible way forward in the matter.

Skilled talent mobility and exchanges have “contributed enormously to technology development, innovation, economic growth, competitiveness and wealth creation” in the US and India, the ministry said. “Policy-makers will therefore assess recent steps taking into account mutual benefits, which include strong people-to-people ties between the two countries,” it said.

In a nod to a reaction from Nasscom, the main trade association and advocacy group for India’s tech industry, the external affairs ministry noted that Indian industry had already issued an initial analysis “clarifying some perceptions” related to the H-1B programme.

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For India, the stakes are considerable as more than 70% of H-1B applications approved in recent years have gone to Indian workers. A majority of approvals every year since 2010 have also gone to Indian workers. The H-1B visa allows companies to employ foreign professionals in specialised sectors such as technology, engineering and medicine.

Almost 400,000 H-1B applications were approved in 2024, though 65% of those applications, or almost 259,000, were renewals. The remaining 35% were fresh applications. China accounts for the second largest group of foreign workers receiving H-1B visas.

Three of the top 10 H-1B employers in 2023 – Infosys, Tata Consultancy Services and Cognizant Technology Solutions – were either headquartered in India or originated in the country. However, this marked a decline from 2016, when six of the top 10 firms had ties to India.

Among the top five employers with H-1B approvals were Amazon Com Services (10,044), Tata Consultancy Services (5,505), Microsoft Corporation (5,189), Meta Platforms (5,123) and Apple (4,202), according to data from the US Citizenship and Immigration Services as of June 2025.

Nasscom, in its response to the US administration’s move, pushed back against Trump’s contention in a proclamation that the H-1B programme amounts to a “national security threat”. The industry body said in a statement firms with ties to India that employ holders of H-1B visas follow necessary governance and compliance in the US for H-1B processes, pay prevailing wages and contribute to the local economy and innovation partnerships. “The H-1B workers for these companies, by no means, are a threat to national security in the US,” it said.

Trump’s proclamation contended that abuse of the H-1B programme is a “national security threat”, and US law enforcement agencies have investigated outsourcing companies for engaging in visa fraud, money laundering and racketeering. He also contended abuses of the H-1B programme “present a national security threat by discouraging Americans from pursuing careers in science and technology”.

Nasscom said Trump’s proclamation introducing the $100,000 fee for H-1B visa applications will impact Indian nationals working for global and Indian companies and disrupt the business continuity of technology services companies for onshore projects despite the industry reducing dependency on H-1B visas over the years.

“A one-day deadline creates considerable uncertainty for businesses, professionals and students across the world. Policy changes of this scale are best introduced with adequate transition periods, allowing organisations and individuals to plan effectively and minimise disruption,” Nasscom said, referring to Trump’s proclamation entering into force on September 21.

There was also uncertainty and confusion about whether the fee of $100,000 was a one-time payment. Trump’s proclamation spoke about all H-1B “petitions [being] accompanied or supplemented by a payment of $100,000”, while US commerce secretary Howard Lutnick told reporters the $100,000 fee will apply annually for each of the three years of the visa’s duration, and that details are “still being considered”.

Ajay Srivastava, founder of Global Trade Research Initiative (GTRI), said Trump’s decision to raise H-1B visa fees to $100,000 – from below $1,000 – is likely to hurt the US more than India. “Indian IT firms already employ 50% to 80% locals in the US, about 100,000 Americans in total, so the measure won’t create many new jobs. Instead, it will make hiring Indians onsite costlier than hiring locals.

“Faced with this huge fee, firms will accelerate offshoring, doing more work remotely from India. That means fewer H-1B petitions, less local hiring in the US, higher project costs for US clients, and slower innovation.”