New Delhi: United States President Donald Trump announced a sweeping overhaul of the H-1B visa system Friday—a move set to have global humanitarian consequences and reshape the skilled immigration landscape in the US.
A presidential proclamation imposed a revised $1,00,000 fee for companies sponsoring H-1B visas, with US Commerce Secretary Howard Lutnick initially describing it as an annual charge, reflecting a sharp jump from the current $2,000–$5,000 yearly fee range.
In the latest development, the White House has clarified that the $1,00,000 fee applies to new H-1B visa petitions of prospective applicants, not to current H-1B holders or their visa renewals. In some briefings, it was termed as a one-time levy per visa petition.
In any case, a deadline of 21 September set for the implementation of the order has led to panic among H-1B visa holders, particularly in India, which supplies the majority of workers living in the US on these visas.
Since 1990, the H-1B system has allowed American employers to bring foreign workers with specialised skills to work in the US for an initial three years, extendable to six.
Each year, nearly 85,000 H-1B visas are granted via a lottery system, according to the US Citizenship and Immigration Services. Between October 2022 and September 2023, 72 percent of nearly 4,00,000 visas were granted to Indian nationals. For Indian information technology (IT) giants, such as Infosys, TCS, HCL, and Wipro, H-1B is crucial for staffing projects in the US, with around 20,000 visa approvals secured just last year.
In his order, Trump said that the move will ensure that only the “most extraordinary people” make it through the system, discouraging what he called the “abuse” of the H-1B visa system by outsourcing firms. The Trump administration has similarly insisted that the hike will prevent outsourcing firms from overtly relying on the system, allegedly undercutting American wages.
The presidential proclamation highlights that between 2000 and 2019, the number of foreign STEM workers in the US doubled, while American STEM occupations increased by 44.5 percent. The foreign workforce share in occupations requiring computer and math skills climbed to 26.1 percent in that period from 17.7 percent.
Howard Lutnick earlier said that the H-1B visa programme allowed too many “bottom quartile” workers, earning below-average wages, into the US. “We are going only to take extraordinary people at the very top,” he added, claiming the newly introduced visa fee would raise over $100 billion for the US treasury.
The finances
India, the largest supplier of H-1B workers, has swiftly registered its concerns about the order. The Ministry of External Affairs (MEA) has warned of “humanitarian consequences by way of disruption caused for families”, noting that spouses and children often face uncertainty linked to the principal workers’ status.
MEA spokesperson Randhir Jaiswal has said that both the US and Indian industries have a “stake in innovation and creativity”, stressing that skilled talent mobility has “contributed enormously” to economic growth in both countries.
In a statement, the foreign ministry wrote, “The government has seen reports related to the proposed restrictions on the US H-1B visa programme. The full implications of the measure are being studied by all concerned, including by Indian industry, which has already put out an initial analysis clarifying some perceptions related to the H-1B programme.”
Trump’s order comes just days before an Indian trade delegation is scheduled to visit Washington, and weeks after the US imposed a 25 percent tariff on Indian exports as a penalty.
Now, a six-year visa will cost companies up to $6,00,000, plus the salaries and legal fees, and that would make the whole sponsorship process prohibitively expensive.
While Trump has argued that only the “truly valuable” hires would justify the investment, critics have warned that the policy could shrink the talent pipeline for American firms, already facing skill shortages.
India’s technology industry body, the National Association of Software and Service Companies (NASSCOM), has raised concerns over President Donald Trump’s sudden H-1B visa fee hike, warning of its impact on Indian technology firms, and the fallouts of a tight deadline of 21 September.
“The timeline for implementation (anyone entering the US after 12:01 am, 21 September) is also a concern,” NASSCOM said, adding that the one-day deadline created considerable uncertainty for businesses, professionals, and students.
Emphasising America’s need for high-skill talent, NASSCOM further said that such policy shifts “are best when they are introduced with adequate transition periods”. It warned, “adjustments of this nature can potentially have ripple effects on America’s innovation ecosystem and the wider job economy”.
The body said that Indian technology services firms might face disruptions in onshore projects, but also said,“Companies will work closely with clients to adapt and manage transitions.”
Reports are emerging that many H-1B visa holders and their dependents in the US are scrambling to go back to the US within 24 hours. They fear they will be locked out. Though White House officials have clarified that existing visa holders can re-enter freely, the panic reflects the precariousness of families dependent on temporary work permits.
(Edited by Madhurita Goswami)
Also Read: Do you have an H-1B visa or are you applying for one? How Trump’s new order affects you