Source Credit : Portfolio Prints
What’s Changed
- On September 19, 2025, U.S. President Donald Trump signed a proclamation introducing a one-time fee of USD 100,000 for new H-1B visa applications.
- This dramatic increase is a sharp jump from the previous fees, which ranged in the few thousands for application and processing.
- The fee only applies to new visa applications filed after September 21, 2025. Existing H-1B visa holders, or those seeking renewals under existing visas, are not subject to this new fee.
Why This Matters
For the Indian IT industry, the impact is potentially severe:
Cost Disruption
A fee of USD 100,000 per new H-1B visa is extremely high, particularly when many roles sponsored on H-1B are client-facing or service delivery roles that may not justify such steep costs under current contracting models. This could make sponsoring new foreign talent far less economical.
Urgency & Uncertainty
The implementation is abrupt—companies and professionals have very little time to adapt. Nasscom (India’s industry association for IT and outsourcing) has flagged concerns over this “one-day deadline” for implementation, saying it creates substantial uncertainty.
Strategic Shifts
Indian IT firms have long relied on H-1B visas to deploy workers (especially for on-site or client-site roles) in the U.S. With the cost of that strategy skyrocketing for new hires, firms may:
- Reduce use of H-1B visas for new employees, especially for roles that can be done off-shore.
- Shift more work to delivery centres in India (or in other lower-cost offshore/near-shore locations).
- Increase hiring of U.S. citizens / green card holders.
Reprice or renegotiate contracts to absorb or pass through the additional visa cost.
Talent Movement
There could be a reverse migration (“wapsi”) effect: some Indian tech workers may choose (or be forced) to return to India (or move to other countries) if opportunities in the U.S. become economically less viable. This has the potential of boosting Indian startups, AI, SaaS, and deep-tech sectors, where experienced talent returning home can contribute substantially.
Diplomatic, Legal & Human Impacts
- The Indian government has expressed concern about the “humanitarian consequences” for families and individuals affected.
- There may be legal challenges to the policy, both in the U.S. and via international trade / diplomatic channels.
- The innovation ecosystems of both the U.S. and India could feel ripple effects: talent mobility has long been a driver of cross-border innovation. Disruptions can reduce that dynamism.
How Indian IT Is Reacting / Likely to Respond
- Nasscom has already spoken out: warning about disrupted business continuity for ongoing on-shore projects, expressing concern over how rapidly the policy was implemented, and calling for clearer transition rules or waivers
- Major firms will likely re-model their U.S. operations: fewer onsite deployments, more remote or offshore work.
- Contract negotiations may need to factor in visa costs and risk adjustments. Some contracts may include clauses to share or adjust for unexpected costs like this.
- More aggressive investment in “Global Capability Centers” (GCCs) in India or other near-shore locations to take on more of the workload currently performed by employees on H-1Bs in the U.S.
- Push for government engagement: Indian leaders are urging similar action, either diplomatic protests or seeking clarifications / mitigations. The government will likely negotiate or seek exceptions for critical sectors.
Longer-Term Consequences
- The U.S. may see a decline in new foreign high-skilled workers under H-1B, which could impact sectors relying on foreign talent (tech, engineering, academia).
- Indian IT’s global model might further evolve from “onsite heavy” to “offshore / hybrid” heavy. This could cost Indian firms in terms of premium earnings from onshore work, but might also reduce costs.
- Talent flows could realign: we may see more competition from other countries for Indian tech talent; Indian tech hubs might benefit from “returnees”.
- Costs for U.S. companies increase; some may reduce hiring of foreigners or shift work overseas to avoid fees. This could impact competitiveness if key skills are in short supply domestically.
Open Questions / Issues to Monitor
- Legal challenges: Is the proclamation consistent with U.S. law? Critics argue that certain aspects may be challenged in courts.
- Clarity on waivers or exemptions: The policy mentions potential for waivers if hiring certain roles or in national interest etc. How those will be administered will matter a lot.
- Interpretation over “one-time” vs “annual” fee: Initially some reports described it as annual, but clarifications have been issued that it is a one-time application fee. How this plays out in practice, and how employers and visa applicants adapt, will be watched closely.
- Impact on smaller firms/startups: Larger firms may absorb costs more easily, but smaller Indian IT firms or U.S. companies and startups that rely on foreign talent may be disproportionately hit.
Conclusion
The USD 100,000 fee on new H-1B visas marks a watershed moment for Indian IT. What has been a relatively stable mechanism for deploying tech talent into the U.S. is now significantly more expensive and administratively risky. For many firms, business models will need to be rethought. For individuals, career paths and migration choices may be affected. Governments and industry associations will need to engage both diplomatically and contractually to manage the disruption.
