Trump's new tariff: Hits Indian IT sector with massive H-1B visa fee hike

Another flip-flop move by Trump has sent shockwaves through the global tech industry and will particularly create more uncertainty in India. The US President signed an executive order late Friday imposing a staggering $100,000 annual fee on H-1B visa applications and extensions, effective immediately from 12:01 a.m. EDT on September 21. The policy, aimed at curbing what the White House calls "abuse" of the program and protecting American jobs, is poised to disproportionately hammer India's Information Technology sector, which relies heavily on the visa program to supply talent to U.S. firms.
The order not only applies to new applications but also requires existing H-1B holders to pay the fee for renewals and even re-entry if they're currently abroad, stranding thousands who may be traveling for festivals like Dussehra or family visits.
The H-1B visa, a cornerstone for skilled foreign workers in specialty occupations like technology and engineering, has long been dominated by Indian professionals. Over 70% of the approximately 85,000 visas issued annually go to Indians, fuelling giants like Infosys, Tata Consultancy Services (TCS), and Wipro, who provide outsourcing services to American corporations. But with the new fee—equivalent to roughly ₹83 lakh per year—experts predict a seismic shift that could force companies to rethink hiring strategies, potentially leading to mass layoffs, accelerated offshoring, and a reverse brain drain back to India.
It will also hit the remittance economy of India. Expat Indians send back $100 billion yearly from the U.S. alone.

MAJOR FALLOUT

"This is reckless and will have a profoundly negative impact on the IT industry," said U.S. Congressman Raja Krishnamoorthi, an Indian-American Democrat from Illinois, in a statement echoing concerns from lawmakers and community leaders. One X user lamented the abruptness, noting it could leave "tens of thousands" of Indians in limbo with just hours to act.
The fallout extends beyond finances. Critics argue the policy could stifle U.S. innovation by limiting access to global talent, with one analyst posting a warning on social media that it might "flatline brain drain" from Europe and elsewhere to America, benefiting competitors like the UK, Canada, and Australia. 
Indian IT leaders fear accelerated offshoring, where U.S. companies might simply move operations to India to dodge fees, some IT industry analysts said.
The White House defends the order as a national security measure, claiming the H-1B program undercuts American wages and discourages STEM pursuits among U.S. citizens. Supporters hailed it as a "master stroke" for American workers, with one calling it a blow to "H1B scamming." But detractors, including immigration expert Daniel Di Martino, predict it could "destroy" U.S. sectors like tech and healthcare if not challenged in court.
As legal battles loom and affected workers scramble, the order underscores Trump's aggressive immigration stance in his second term. For India's IT powerhouse, the coming months will test resilience amid what could be the biggest disruption since the 2020 pandemic visa suspensions.