The recent decision by former US President Donald Trump to impose a substantial annual fee of $100,000 on H-1B visas has sent waves of concern through the Indian community and the nation’s vital IT services sector.
This new fee, which amounts to approximately ₹90 lakh at current exchange rates, targets employers sponsoring foreign workers for US visas. The impact is particularly felt by Indians, who constitute a significant portion of H-1B visa recipients. Currently, around 300,000 high-skilled Indian professionals, primarily in the technology industry, are in the US on H-1B visas.
The US issues about 85,000 H-1B visas annually through a lottery system. India accounts for roughly three-quarters of these recipients, with approximately 70% of all H-1B visa holders being Indian nationals. Chinese professionals represent the next largest group, making up about 11-12% of H-1B visa holders.
Previously, H-1B visa fees were significantly lower, typically around $215 plus an additional $750, with the total cost for some companies potentially exceeding $5,000. The new fee represents a 20- to 100-fold increase.
The H-1B visa has been instrumental in the success of Indian-Americans, contributing to their status as one of the most highly educated and highest-earning demographic groups in the US, whether native-born or immigrants. Indian IT companies like Infosys, TCS, and Wipro have historically leveraged these visas to send junior and mid-level engineers to the US, providing them with crucial exposure to the U.S. market and clientele.
The increased fee structure is intended to encourage companies to sponsor only those senior professionals whose expertise justifies the substantial cost. As U.S. Commerce Secretary Howard Lutnick stated, “No longer will you put trainees on an H-1B visa — it’s just not economic(al) anymore. If you’re going to train people, you’re going to train Americans.” He further elaborated that the aim is to attract highly skilled and high-earning individuals, contrasting this with previous policies that allegedly brought in lower earners, thereby taking jobs from Americans.
While the annual H-1B visa quotas remain unchanged at 65,000 for regular applicants and an additional 20,000 for those with advanced degrees, Lutnick indicated that fewer visas would likely be issued due to the prohibitive cost.
The visa’s terms remain consistent: a three-year duration with one possible renewal, extending the total stay to six years.
Tech leaders, including figures like Elon Musk, have expressed concerns, warning that such measures could harm American innovation by limiting access to essential talent, especially when the U.S. may not have sufficient homegrown expertise.
Data shows a surge in H-1B visa applications in recent years, with approvals peaking in 2022 under President Joe Biden. Conversely, rejections saw their highest point in 2018 during Donald Trump’s presidency. In 2017, his administration intensified scrutiny, leading to a rejection rate of 24% in 2018, a significant jump from the 5-8% under President Obama and the 2-4% under President Biden.
In India, the policy shift has sparked political debate, with opposition leaders criticizing Prime Minister Narendra Modi’s administration. Rahul Gandhi, a prominent opposition figure, commented, “I repeat, India has a weak PM,” implying that India’s standing was diminished. Mallikarjun Kharge, the Congress party president, sarcastically referred to the visa fee as a “gift” to Modi, referencing Trump’s praise for the Prime Minister.
However, some technocrats and business leaders in India view this situation as a potential opportunity, suggesting it could encourage the retention of Indian talent within India or even facilitate the return of professionals who might otherwise seek opportunities abroad. The long-term effects on the global tech industry, particularly India’s $283 billion IT services sector, as it navigates AI advancements and economic uncertainties, remain to be seen.
Meanwhile, Prime Minister Modi’s emphasis on self-reliance resonates with this situation, even without direct reference to the H-1B visa changes. He recently stated, “We have no major enemy in the world. Our only real enemy is our dependence on other countries. This is our biggest enemy, and together we must defeat this enemy of India.”
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