‘100% labour, 0% innovation’: Viral post warns of India’s tech crisis after H-1B clampdown

In a strongly worded social media post, Vikas Vij warned that India’s IT industry faces its “biggest crisis yet” after US President Donald Trump issued a sweeping Presidential Proclamation that virtually dismantles the H-1B visa program.

The proclamation, available on the White House website, introduces steep costs for both new and existing H-1B holders — $100,000 per employee per year. Renewal visas will also carry the same cost, making it economically unviable for companies to rely on foreign workers. In addition, existing visa holders are barred from traveling abroad, with firms like Microsoft already warning employees to return to the U.S. immediately.

While the legal text is couched in ambiguous language, Trump and Commerce Secretary Lutnick openly stated that the goal is to replace foreign IT workers with Americans. Lutnick was quoted saying that the six-year renewal cycle would effectively cost firms $600,000 per employee, deterring reliance on H-1B talent.

Indian IT in the crosshairs

The US government explicitly accused IT outsourcing firms of “manipulating the H-1B system” and engaging in “visa fraud.” Tata Consultancy Services (TCS) is reportedly under investigation by the US Equal Employment Opportunity Commission for discriminatory layoffs of American staff.

India dominates the H-1B pool — 71% of all petitions approved in FY2024, or nearly 3 lakh workers, were from India. Most are employed in IT services, making the sector especially vulnerable. Analysts say Infosys’ recent buyback move signals that Indian IT majors anticipated policy risks.

Cascading impact on Indian economy

India’s $250-billion IT industry contributes about 7% to national GDP and supports millions more through indirect employment and remittances. Vij warned that a slowdown in US demand will not only hit corporate revenues but also dampen domestic consumption, which has already shown signs of fatigue.

The commentary also highlighted India’s structural weakness: a lack of innovation. With R&D spending stagnant at 0.7% of GDP for four decades, India lags far behind China, which spends 2.7%. In absolute terms, Chinese firms invest 20 times more annually in research and development than their Indian counterparts.

'Tech Trap' warning

“India’s economy grew for decades on just one engine — domestic consumption. But no country in history has thrived on consumption alone. Without international competitiveness and innovation, India risks condemning itself to permanent economic mediocrity,” Vij cautioned.