H-1B Visa Fee Hike | 30 Sep 2025

Source: IE

Why in News?

The U.S. President has signed an executive order mandating companies to pay USD 100,000 per H-1B visa, effective from 21st September, with a duration of 12 months unless extended. This fee increase is expected to significantly affect Indian IT firms, which file the majority of H-1B petitions.

What is the H-1B Visa Program?

• About: The H-1B visa is a temporary, non-immigrant visa that enables US companies to hire skilled foreign professionals in specialized fields such as STEM and IT, requiring at least a bachelor’s degree. 
  • Introduced in 1990, it was designed to help employers address skill shortages when qualified US workers were not available.
• Validity Period: The H-1B visa is valid for up to six years. After this, holders must either leave the US for 12 months before reapplying or seek permanent residency (Green Card).
• Share of Indians: Indians dominate H-1B approvals, making up 70%+ annually since 2015. China consistently ranks second, with 12–13% of approvals since 2018. 
• Quotas and Exemptions: Each fiscal year, there is a cap of 65,000 new visas. An additional 20,000 visas are available for those with a US master’s degree or higher.
  • Cap exemptions apply for applicants continuing employment or working with universities, affiliated nonprofits, and government research bodies.
• Benefits of H-1B Visa for Indians: 
  • Dominance in Tech and STEM Fields: Indians make up over 70% of H-1B recipients, dominating IT and STEM roles, with more than 80% of computer-related jobs going to them, making them vital to US tech companies.
  • Medical and Healthcare Contribution: Indians constitute about 22% of international medical graduates in the US, representing 5–6% of all US physicians. H-1B holders play a key role in hospitals and surgical units, addressing healthcare staffing shortages.
  • Educational and Career Pathways: Many Indian students use H-1B visas to work in the US after higher education, boosting career prospects. The visa also provides global exposure, enhancing skills and employability.
  • Strategic and Industry Benefits: The program supports Indian IT sector growth by enabling deployment in high-revenue US projects, sustaining over half its revenue.

What Can be the Impact of H-1B Visa Fee Hike on India?

• Impact on Indian Professionals: The reduction in H-1B visas will limit opportunities for Indian tech professionals, restricting access mainly to senior specialized roles and blocking career growth for early to mid-level talent. 
  • Existing visa holders may also face job insecurity as costly renewals and transfers deter employers.
• Impact on Indian IT Companies: A USD 100,000 fee per employee would undermine the cost advantage of Indian IT firms like Infosys, TCS, and Wipro, causing revenue losses and reduced US contracts. 
  • To adapt, they would need to shift toward local hiring, greater offshoring, and increased use of automation/AI.
• Impact on Indian Economy: A drop in H-1B visa holders from India could cut remittances by up to USD 400 million annually, adding pressure on the rupee, which is already among Asia’s weakest-performing currencies.
• Impact on India-US Relations: The H-1B restrictions could strain a cornerstone of the India-US strategic partnership, impacting a key economic and tech interest. 
  • Indian professionals may diversify globally, seeking opportunities in Canada, Australia, and Europe.
• Impact on US Companies: It could harm US companies like Amazon, Microsoft, and Google by exacerbating STEM talent shortages, raising wages and operational costs, and forcing competition for a limited domestic workforce. 

What Strategies can India Adopt to Address the H-1B Visa Fee Hike?

• Diplomatic & Government-Led Measures: Use forums like the India-US Trade Policy Forum and 2+2 Ministerial Dialogue to show how the H-1B fee hike harms US innovation and Indo-US strategic ties.
  • Consider filing a dispute at the WTO, arguing the hike is a protectionist measure unfairly targeting Indian IT companies, potentially violating the General Agreement on Trade in Services (GATS).
• Strategic Shift for Indian IT Companies: They can accelerate the ‘localization’ model to hire more US-based talent and boost offshore delivery using AI, cloud, and telepresence technologies. 
  • Additionally, Indian IT companies should diversify global markets by expanding in Europe, Japan, Australia, and the Middle East to reduce US dependency.
• Skill Development: India should upskill professionals in high-value areas like AI, cybersecurity, and quantum computing, where higher visa costs remain justifiable for US clients. 
  • Simultaneously, promoting reverse migration and brain gain can attract talent back to India, strengthening the domestic tech ecosystem.
• Strengthen Advocacy: Leverage the Indian diaspora to advocate for rational immigration reforms, emphasizing the contribution of Indian talent to the US economy.

Conclusion

The proposed H-1B visa fee hike represents a significant protectionist shift, threatening a cornerstone of India-US economic ties. While straining US innovation and Indian IT revenues, it may ultimately accelerate India's strategic pivot towards skill development, market diversification, and strengthening its own domestic tech ecosystem.