Context:

Under President Donald Trump, the United States recently raised the fee for new H-1B work visas to USD 100,000 per year for employers hiring foreign skilled workers. This is a steep jump from the earlier fees (ranging from USD 2,000 to 5,000, depending on employer size etc.).

Importance of H-1B Visa Fee Hike:

Indians constitute 71% of all approved H-1B applications, with China as the next largest group.

Tech companies rely heavily on H-1B visas to hire skilled workers, and international students use it to transition from study to work in the U.S.

Impacts on the IT/tech services sector:

• • • Increased costs for Indian firms that deploy skilled workers to the US (on‑site projects).
    • Potential disruption of business continuity, delays in projects, or firms rethinking deployment strategy.
    • Reduced growth in IT export projections: some reports (e.g. Emkay) suggest India's IT export growth for FY26 may drop below 4% if the fee hike persists.

About H-1B Visa:

• • Purpose: It allows US companies to hire skilled foreign workers for jobs that require specialised knowledge (like in IT, engineering, finance, etc.).
  • Eligibility: Workers must have at least a bachelor’s degree and work in a field requiring a high level of skill.

When and Why Was It Started?

• • The H-1B program was launched in 1990.
  • Goal: To help employers fill jobs when qualified Americans are not available, by hiring temporary foreign professionals.

Duration of the Visa:

• • Initially valid for up to 3 years.
  • Can be extended once, making a maximum of 6 years in most cases.

Annual Limit (Cap):

• • 65,000 visas issued each year under the regular quota.
  • Extra 20,000 visas for applicants with a master’s degree or higher from a US university.

Why It Reflects a Larger Problem for India?

The recent hike in H-1B visa fees by the US reveals deeper structural vulnerabilities in India’s growth model.

1.      Overdependence on External Factors: India heavily relies on foreign markets, especially the US, for skilled job opportunities, education, and technology. Any policy shift abroad causes domestic disruptions.

2.      Weak Domestic Job Ecosystem: Limited high-end jobs and R&D opportunities at home push professionals to seek careers overseas. India lacks sufficient alternatives if such avenues shrink.

3.     Export Model Risks: India’s IT sector depends on onsite deployments under H-1B visas. Higher costs now threaten profitability and competitiveness.

4.     Lack of Policy Readiness: The abrupt US decision exposed India’s lack of early-warning systems, flexibility, and diplomatic safeguards.

5.     Social and Strategic Implications: Beyond economics, this impacts families, remittances, and aspirations. It also challenges India’s vision of strategic autonomy under Aatmanirbhar Bharat.

Way Forward:

India must:

• • Strengthen domestic innovation and job creation.
  • Improve diplomatic engagement.
  • Build resilience in exports, talent, and supply chains.

 Conclusion:

The H-1B issue is not an isolated challenge, but a reflection of India’s deeper strategic dependencies. It underscores the urgent need to diversify opportunity structures, strengthen domestic capabilities, and build a future-ready, resilient growth model.