Mint Explainer: What Spooked The Trump Administration On H-1B Visas?

(MENAFN- Live Mint)

The US government's sudden decision to impose a $100,000 annual fee on companies sending employees to the US on H-1B visas has forced Indian IT firms to return to the drawing board. The move, announced late on Friday by President Donald Trump just eight months into his tenure, has jolted an industry that sends thousands of skilled professionals to the US each year, often to fill roles for which American talent is scarce.

Mint examines the broader implications of this steep hike for India's $250-billion IT services industry and the millions of professionals whose livelihoods depend on it.

What is an H-1B visa, and what spooked the Trump administration?

An H-1B visa grants an employee permission to work in the US for a maximum of six years, because the skills he or she has are not widely available in America.

The Trump government alleged companies use this route to“replace" American workers and“artificially suppress wages, resulting in a disadvantageous labor market for American citizens".

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The H-1B visa has“been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labour", read the proclamation Trump signed on Friday.

The US government said while the number of foreign workers in science, technology, engineering, and math (STEM) fields doubled to 2.5 million in 2019 from 1.9 million in 2019, the STEM employment increased only around 44.5%, questioning where the rest were coming from. One of Trump's main promises while campaigning for his second term was to“bring jobs back" to the US.

Will H-1B sponsors pay an annual fee or a one-time fee?

If you have an H-1B visa that is nowhere close to renewal, you can stay put in US for the time being. But for those who have applied for fresh visas or renewals, their sponsor firm (employer) will have to pay $100,000 to get a visa, the duration of which will vary from a few months to a few years, depending on the nature of the project.

Here lies the catch. According to Sajai Singh, partner, JSA Advocates & Solicitors, executive orders remain valid for 12 months, after which they need to be renewed. If the US government decides no fee is payable after 12 months, they may let the order lapse. If not, they will renew it. If the amount is changed after 12 months, firms will have to pay the revised sum.“This will hit the IT industry the hardest. Families that are dependent on H-1B visa holders will also be affected," Singh told Mint.

Is this a body blow for India's IT sector?

Nasscom, the industry body that represents the IT services sector, said the decision“can potentially have ripple effects on America's innovation ecosystem and the wider job economy" and highlighted the impact on the Indian IT industry.

“It will also impact Indian nationals that are on H-1B visas working for global and Indian companies. India's technology services companies will also be impacted as business continuity will be disrupted for onshore projects which may require adjustments. Companies will work closely with clients to adapt and manage transitions". An onshore employee is employed by the firm to work on a project in another country.

Also Read | Trump's revised H-1B visa fees amount to 10% of 5 Indian IT firms' profit

According to data from US Citizenship and Immigration Services, in the first six months of 2025, TCS, Cognizant Technologies, Infosys, LTI Mindtree, Wipro sent 13,332 employees to the US on H-1B visas. Assuming a similar number of employees are sent over the next six months, a back-of-the-envelope calculation shows that these companies will have to pay at least $1.3 billion in fees. In January, Mint reported that as per US Citizenship and Immigration Services, as many as 188,400 H-1B visas were granted in 2024. Most of them were issued to employees of technology companies. US government data showed nearly three-fourths of H-1B visas are granted to Indian nationals.

One day to return

Employees with H-1B visas who are outside of the US will have to head back to base by 21 September. According to lawyers, immigration officers may have instructions to allow entry only to those H-1B visa holders who have the latest fee receipt. Many Indian H-1B holders are likely to be in India at present, owing the the festive season.

“A one-day deadline creates considerable uncertainty for businesses, professionals, and students across the world. Policy changes of this scale are best introduced with adequate transition periods, allowing organizations and individuals to plan effectively and minimize disruption," said Nasscom.

Will Indian in the US on other types of work visas be affected?

While H-1B visas are most common, there is an L-1 visa that is granted in an inter-company transfer. But according to an industry executive, these visas are too few in number to come under scrutiny. In fact, before the focus shifted to H-1B visas, the US government had its eye on people the US on student visas. In May, the US government directed its embassies to stop scheduling new interviews for international student visas.

Before that, the US embassy in India had cautioned students that skipping classes or leaving the program without informing authorities would lead to their visas being revoked.

Also Read | Trump's H-1B visa fee hike: the death of onsit

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