Illustration for representation. (© India Sentinels 2025–26)
New Delhi: The United States president, Donald Trump, signed a sweeping executive order on September 19, 2025, imposing a $100,000 annual fee on H-1B visa applications – the most radical transformation of America’s skilled worker visa programme in decades. The measure, which took effect on September 21, 2025, at 12:01am EDT, represents a seismic shift from current processing costs of $2,000–$5,000 to what critics describe as a prohibitive “pay to play” system.
Major American technology companies issued urgent advisories to their H-1B employees within hours of Trump’s announcement, instructing them to remain in the United States or return immediately before the September 21 deadline. Microsoft advised H-1B visa holders to “remain in the US for the foreseeable future” to “avoid being denied re-entry”, while Amazon recommended employees holding H-1B and H-4 visas to “return to the US before 12am EDT September 21”. JPMorgan’s external immigration counsel warned that “H-1B visa holders currently in the US should remain in the US and avoid international travel until the government issues clear travel guidance”.
The Trump administration’s justification centres on alleged “systemic abuse” of the H-1B programme by outsourcing companies, which Trump claims have exploited the system to replace American workers with cheaper foreign labour.
The US commerce secretary, Howard Lutnick, emphasized the administration’s goal of ensuring only “very highly skilled” workers enter the US. He said, “If you’re going to train somebody, you’re going to train one of the recent graduates from one of the great universities across our land. Train Americans. Stop bringing in people to take our jobs.”
Devastating impact on top employers
The fee increase fundamentally alters hiring economics for American companies, with major tech employers facing astronomical costs under the new regime. Amazon, which secured 10,044 H-1B visas in fiscal year 2025 – the highest among all companies – would face annual costs exceeding $1 billion solely in visa fees. Other heavily affected firms include Microsoft (5,189 H-1B holders), Meta (5,123), Apple (4,202), and Google (4,181).
The substantial cost burden is expected to make companies far more selective about H-1B sponsorship, reserving it only for senior-level positions that justify the $100,000 annual expense. This shift could eliminate what the administration calls “trainee programmes” where companies hire less experienced foreign workers for training and development.
Smaller companies and startups, which often cannot afford the $100,000 annual fee, may be effectively shut out of the H-1B programme entirely, creating a two-tiered system where only large corporations with substantial resources can access global talent pools.
Indian professionals bear brunt
India faces the most severe impact from this policy change, as Indian nationals constitute approximately 71 per cent of all H-1B visa holders. According to US Citizenship and Immigration Services data, of the 399,395 H-1B visas approved in 2024, Indians received an overwhelming 283,270 visas, while China was a distant second with just 46,730 visas (11.7 per cent).
The fee represents a particularly harsh financial burden when compared to typical compensation levels, exceeding the median annual salary of fresh H-1B visa holders and representing more than 80 per cent of the average annual salary of all H-1B workers. This disparity raises serious questions about the accessibility of the programme for genuinely skilled professionals who cannot command the highest salaries.
Indian IT services giants face severe operational challenges under the new regime. Tata Consultancy Services, the second-largest H-1B beneficiary with 5,505 approvals in 2025, along with other major firms like Infosys (2,004), LTIMindtree (1,807), and HCL America (1,728), must now reassess their US delivery models. These companies have traditionally used H-1B visas to deploy engineers and developers on US client projects, but the new fee structure makes this model financially unviable for many positions.
Market response
Indian IT stocks experienced immediate negative impact on US markets following the announcement. Infosys American Depository Receipts fell 3.41 per cent to $16.97 on the New York Stock Exchange, while Wipro ADRs declined 2.10 per cent to $2.80. Cognizant, heavily anchored in India, slipped 4.75 per cent to $66.94. The weakness reflects broader concerns about the sustainability of Indian IT companies’ US-focused business models, with Infosys already having declined 23 per cent from its 52-week high and TCS dropping more than 29 per cent.
The restrictions threaten India’s position as the world’s top remittance recipient, which received $129 billion in 2024, with nearly 28 per cent originating from the United States. A large-scale return of Indian professionals could severely impact remittance flows, affecting families across states like Kerala, Uttar Pradesh, and Bihar. However, industry experts suggest the impact may be more limited than initially feared, as major Indian IT companies have been reducing their H-1B dependency over recent years.
Nasscom alarmed over timeline
Nasscom, India’s apex IT industry body representing the $283 billion IT and business process outsourcing sector, expressed significant concern about the policy’s abrupt implementation. The organisation criticised the one-day implementation timeline, stating it created “considerable uncertainty for businesses, professionals, and students across the world”. Nasscom emphasised that “adjustments of this nature can potentially have ripple effects on America’s innovation ecosystem and the wider job economy”.
The industry body stressed that Indian IT workers “by no means are a threat to national security in the US” and highlighted their contributions to the American economy through wages, local hiring, and innovation partnerships. Despite immediate concerns, some analysts suggest Indian IT companies may be better positioned to weather this challenge than in previous years, having already reduced their H-1B dependency significantly.
Strategic realignment
The Trump administration’s policy represents a gigantic shift in US immigration philosophy, prioritising wealth over skills and potentially undermining America’s competitive advantage in attracting global talent. Legal challenges are expected, with immigration attorneys arguing that president cannot impose it for a variety of reasons, but all going back to the basic fact that “only the US Congress” can authorize fees.
Legal experts contend that visa fees are typically supposed to cover processing costs rather than create prohibitive barriers, making the $100,000 fee vulnerable to court challenges.
For India, the crisis may accelerate the development of domestic technology capabilities and strengthen the country’s position as a global innovation hub. The disruption could provide an opportunity to reverse the long-standing “brain drain”, with more top-tier talent remaining in India to contribute to the domestic innovation ecosystem.
Indian officials privately acknowledge that while the immediate impact would be disruptive, the policy could accelerate trends already underway, with more companies establishing global capability centres to meet talent shortages.
The Trump administration’s H-1B fee increase marks a watershed moment in US-India relations and global talent mobility. While intended to protect American workers and generate revenue, the policy risks undermining the very innovation ecosystem that has made American technology companies globally competitive.
As legal challenges proceed and companies adapt their strategies, the era of accessible skilled worker visas has effectively ended, replaced by a system that explicitly favours wealth over talent and fundamentally alters the landscape of global technology collaboration.
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© India Sentinels 2025-26
