In News:

• In a significant policy shift, U.S. President Donald Trump signed a proclamation in October 2025 introducing a $100,000 (≈ ?88 lakh) sponsorship fee for H-1B visas, dramatically raising the cost for U.S. companies hiring foreign skilled workers.
• The move, presented as a measure to “protect American jobs,” marks one of the most stringent immigration-related economic policies in recent years and has wide-ranging implications for India’s IT sector, which remains the largest user of H-1B visas.

About the Policy

• New Regulation: U.S. employers sponsoring an H-1B worker must now pay a non-refundable fee of $100,000 per application, a steep increase from the earlier few-thousand-dollar processing cost.
• Official Objective: To ensure that only “highly skilled, non-substitutable” professionals are brought into the U.S., while deterring misuse of the program by firms replacing American workers with cheaper foreign labour.
• Rationale: According to the U.S. administration, the H-1B system is one of the most abused visa categories, often exploited by outsourcing companies to fill mid-level tech roles at lower wages.

Understanding the H-1B Visa

The H-1B is a non-immigrant U.S. work visa that allows companies to hire foreign professionals in specialty occupations requiring technical or theoretical expertise—mainly in STEM, finance, healthcare, and IT sectors.

• Introduced: Under the Immigration Act of 1990
• Eligibility: Bachelor’s degree or equivalent in a relevant field
• Tenure: Valid for 3 years, extendable up to 6 years (and beyond if Green Card process is ongoing)
• Quota: 65,000 general visas + 20,000 reserved for advanced U.S. degree holders
• Equal Pay Mandate: Employers must offer wages comparable to those of American workers to prevent labour exploitation

Applications are processed through the USCIS lottery system, which randomly selects qualified candidates.

Impact on India

1. Economic & Corporate Impact

• Cost Escalation: Indian IT majors like TCS, Infosys, and Wipro, which collectively sponsor thousands of H-1B employees annually, will face a steep rise in operational expenses.
• Reduced Hiring Abroad: Companies may shift high-skill operations back to India or relocate nearshore to countries such as Canada or Mexico to avoid the inflated cost.
• Automation Drive: Higher labour costs may accelerate automation and AI adoption within U.S. operations, reducing dependence on human capital from abroad.

2. Workforce & Migration Implications

• Major Beneficiaries Affected: Indians account for nearly 71% of all H-1B approvals, followed by China (≈12%).
• Extended Burden: Since most Indian professionals renew their H-1B multiple times due to the 10–15 year Green Card backlog, the cumulative cost will be enormous.
• Talent Diversion: The measure could divert Indian talent toward Canada, the EU, or Australia, which have relatively liberal skilled-migration policies.

‘Gold Card’ Visa Scheme

Alongside the H-1B fee hike, Trump announced a ‘Gold Card Visa Program’:

• Entry Fee: $1 million for individuals and $2 million for businesses.
• Objective: To attract “extraordinary individuals” capable of creating jobs and investments in the U.S. economy.
• Economic Rationale: The administration projects billions in revenue from the program to help reduce public debt and taxes.
• Selective Entry Policy: The move signals a shift from a skill-based to a wealth-based migration system, prioritizing elite entrepreneurs and investors over mid-level professionals.

Broader Policy Context

• The Trump administration has revived tougher citizenship tests, reinstating a 128-question civics and history exam (scrapped by the Biden government earlier), reflecting a wider push for restrictive immigration vetting.
• This marks a continuation of “America First” politics, emphasizing domestic employment protection and economic nationalism.

Implications for India–U.S. Relations

• Technology and Trade Impact: India’s $150+ billion IT export industry—largely dependent on U.S. markets—could face reduced competitiveness and project delays.
• Diplomatic Challenge: New Delhi must engage with Washington to safeguard the interests of Indian professionals and ensure that the visa restrictions do not spill over into bilateral technology and trade cooperation.
• Shift in Talent Dynamics: The policy could push India to strengthen domestic R&D ecosystems and negotiate reciprocal work mobility frameworks under trade agreements.

Global and Strategic Outlook

• Protectionism Resurgence: The policy aligns with a global trend of tightening skilled-migration channels amid economic uncertainty.
• Business Adaptation: U.S. tech firms like Amazon, Microsoft, Meta, and Google, which collectively secured over 25,000 H-1B approvals in early 2025, may now restructure hiring models or expand offshore R&D hubs in India.
• Brain Drain Reversal: Rising visa barriers could retain skilled manpower in India, strengthening domestic innovation capacity under initiatives like “Skill India 4.0” and “Startup India.”