Increased H-1B Visa Fees Could Significantly Affect Indian IT Sector
U.S. President Donald Trump has announced a sharp hike in H-1B visa fees. Starting soon, companies will have to pay USD 100,000 per year per visa, which is a huge increase from the current fee of around USD 2,000-5,000. This decision is likely to increase the cost of hiring foreign workers, especially for Indian IT firms that depend heavily on H-1B visas.
The H-1B visa allows US employers to hire foreign workers for the job roles that require highly specialised knowledge and a bachelor’s degree or higher. As per the Trump Administration, the increased fee will ensure that the workers brought into the US are actually very highly skilled and do not replace the Local workers. While Will Scharf, White House staff secretary, called this new decision the “most abused visa” system in the US immigration system.
Indian tech professionals are one of the main beneficiaries of the US H-1B visa programme, which allows skilled workers to work in the United States. The sudden increase in the Visa fees comes when the Indian IT sector is already facing a difficult time due to macroeconomic uncertainties, tariffs, geopolitical tensions, trade wars, and the upgrading of AI.
Apart from this, if the Halting International Relocation of Employment (HIRE) Act, introduced by Senator Bernie Moreno, becomes effective, the US will hire the local and discourage outsourcing, as this Act levies a 25% tax on payments made to foreign firms for services that benefit US consumers.
Experts say that the increased annual fee of USD 100,000 on H-1B visas will result in Indian IT companies re-evaluating their hiring strategies and business models. Those Indian IT companies that are heavily dependent on H1B Visas will have to suffer as the cost of allocating will rise. If companies decide to pass these higher costs on to clients, it could also affect their competitiveness in the global market. Due to this, many companies will have to explore other countries that have better Visa policies and incentives to attract a foreign workforce.
While other experts say that the Indian IT firms have already reduced their dependency on the H-1B visa by 50% over the past years. Therefore, Indian IT firms will not be much affected by the price hike of the H-1B visa.
