H-1B Visa Fee Hike: Impact on Indian IT & Hiring

New Delhi, Sep 20 (PTI) The USD 100,000 annual fee imposed by the US on H-1B visas will escalate costs and erode competitiveness for heavy H-1B users and may potentially disrupt business models and revenue streams for Indian IT professionals and companies, Sajai Singh, Partner JSA Advocates and Solicitors said on Saturday.

In a move that is bound to impact Indian tech professionals adversely, US President Donald Trump on Friday signed a proclamation that will raise the fee for H1-B visas to a steep USD 100,000 annually. The H-1B visa fee ranges from about USD 2,000 to USD 5,000, depending on employer size and other costs.

Indian techies are among the main beneficiaries of the US H-1B visa programme, which attracts top talent and expertise from around the globe. The Congressional mandated pool is 65,0000 such visas every year along with an additional 20,000 visas reserved for those who have earned advanced degrees in the US.

The visa fee blow comes at a time when the USD 283 billion Indian IT sector is already rattled by a turbulent business environment in the world's largest outsourcing market. The sector faces delays in client decision-making amid macroeconomic uncertainties, tariffs and trade wars, geopolitical tensions, and the changing landscape driven by AI.

Adding to the concerns is the legislative threat of the proposed Halting International Relocation of Employment (HIRE) Act, introduced by Senator Bernie Moreno, which, if passed will curb outsourcing and promote domestic employment by imposing a 25 per cent levy on payments made by American companies to foreign workers for services benefitting US consumers.

Singh from JSA Advocates and Solicitors said that USD 100,000 annual fee on H-1B visas may force IT companies to reassess hiring strategies and business models. Indian IT companies - those relying heavily on H1B visas - may lose their competitive edge, according to Singh.

"The impact of the US proclamation imposing a USD 100,000 annual fee on H1B visas, on IT companies will obviously increase costs allocations, specially if they rely heavily on H-1B visas; potentially forcing them to reconsider their hiring strategies and business models," Singh said.

Eventually, the proclamation may achieve what it set out to do - hiring and training local talent in the US, which could lead to a more localised workforce.

Singh noted that there may be potential disruption of business models and revenue streams for Indian IT professionals and companies.

"If costs are passed on to clients, this could impact competitiveness. I guess Indian IT companies may need to reassess their global delivery models and consider locations other than the US for their operations," Singh added.

Overall, Indian talent may face reduced mobility, and at the same time Trump administration's latest decision could impact innovation and growth of US tech industry too, as it relies heavily on global talent.

"We will need to wait and see how the proclamation is taken to by business associations, and the tech industry. Not to mention the potential of the US facing increased competition from other countries that offer more attractive visa policies and incentives to attract global talent," Singh added.

Industry veteran and Co-Founder and Vice Chairman, AIonOS, CP Gurnani, however asserts that the impact on business will be minimal given that over the past several years, Indian IT firms have significantly reduced their reliance on the H-1B visa, with filings dropping by over 50 per cent.

"This shift is a result of our ongoing strategy to hire more locally, invest in automation, and enhance our global delivery models. While visa fees may change, the impact on our business will be minimal, as we've already adapted to this evolving landscape," he said.

White House staff secretary Will Scharf has said the H-1B non-immigrant visa programme is one of the "most abused visa" systems in the country's current immigration system, and it is supposed to allow highly skilled labourers, who work in fields that Americans don't work in, to come into the United States.

The Trump administration said that the USD 100,000 fee is aimed at ensuring that the people being brought into the country are "actually very highly skilled" and do not replace American workers.

The H-1B programme allows employers in the US to temporarily employ foreign workers in occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor's degree or higher in the specific specialty, or its equivalent.

Earlier, Florida Governor Ron DeSantis had said in an interview to Fox News that the H1B has become a "total scam".