US President Donald Trump has introduced a new plan to charge $100,000 for new H-1B visas that allow American employers to hire foreign workers, a move that has shocked India's IT sector, which is one of the main beneficiaries of the visas, Reuters reported.
According to experts, analysts and economists, India's $283 billion IT sector will be forced to reconsider its long-standing strategy of attracting workers to American projects. About 57% of the sector's total profits come from companies in the United States, which actively use cheaper labor.
India remains the top recipient of H-1B visas, accounting for 71% of all approved applications. China is a close second, receiving 11.7% of the total.
The changes introduced by Trump will force IT companies with clients such as Apple, Microsoft, Meta, and Google to suspend staff rotation abroad, speed up overseas deliveries, and increase hiring of US citizens or green card holders, who have long suffered from a large number of cheaper workers from India.
Ganesh Natarajan, former CEO of IT outsourcing company Zensar Technologies, believes companies will limit cross-border travel and work more with countries like India, Mexico and the Philippines. Industry body Nasscom said such visa changes "potentially have a ripple effect on America’s innovation ecosystem" and disrupt business continuity for offshore projects.
"We expect that companies will become far more selective in deciding which candidates to sponsor, reserving H-1B filings for only the most business-critical roles. This would significantly reduce access to the H-1B program for many skilled foreign nationals and could reshape employer demand," said Vic Goel, managing partner at law firm Goel & Anderson.
These changes are also expected to lead to the growth of US companies’ Global Competence Centers (GCCs) in Canada, Mexico, Latin America and India. The first three regions will see growth due to proximity in time zones, while India, which will house more than half of the world’s GCCs by 2024, will grow due to its broad capabilities and skills. By 2030, the region will have more than 2,200 companies, a market size approaching $100 billion and creating up to 2.8 million jobs.
With the introduction of the new fee, major American companies have also begun urging H-1B holders to refrain from traveling abroad and remain in the U.S. Workers who are abroad have been asked to return to the U.S. immediately.