'India needs to give them a career or...': Expert warns of global shift with new H-1B visa overhaul

In a move that could shake the foundations of Silicon Valley’s hiring model, the Trump administration has proposed a $100,000 annual fee for H-1B visas, which is expected to significantly impact both U.S. tech giants and India's IT workforce. Industry experts are voicing concerns about the long-term consequences for talent recruitment and innovation.

Expert warns: Talent Drain and Outsourcing

Hemant Mohapatra, a startup investor and former H-1B visa holder, shared his surprise on X, commenting on the implications of the new policy. "Wow, didn't expect US to slap a 100k PER YEAR fee on H1B. I was in the US for 15 years on H1B; that would have meant a $1.5M fee paid to the government," he wrote, reflecting on his own experience working in semiconductor research.

Mohapatra highlighted how the $100,000 fee would be detrimental not only to average IT workers but also to highly skilled professionals, particularly in fields like semiconductors, biotech, and robotics.

He warned that this would likely concentrate talent within big tech companies, driving many highly skilled workers to seek opportunities elsewhere, including Australia, the U.K., or back home in India.

"This will advantage big tech and they'll concentrate talent and power over others," he explained. He also expressed concern that the new policy would lead to greater outsourcing of research functions, with countries like India set to absorb the spillover.

The U.S. Pushes for a ‘Train Americans’ Policy

The proposal, unveiled by U.S. Commerce Secretary Howard Lutnick, requires companies to pay $300,000 per H-1B worker over three years, including a $100,000 annual fee. Lutnick echoed the administration's push to curb legal immigration, stating, “Train Americans. Stop bringing in people to take our jobs.” This directive directly targets the H-1B program, which has long been a source of skilled foreign labor, especially from India.

India has been a key contributor to the U.S. tech industry, accounting for 71% of approved H-1B applicants in 2024. Experts, like Deedy Das, a partner at Menlo Ventures, warn that such a policy could force top talent to seek opportunities elsewhere. “This is a direct hit to India’s IT talent,” Das said, adding that the U.S. could become less attractive if it grows too costly and hostile.

The Cost Burden on U.S. Tech Giants

Major U.S. tech companies are bracing for a sharp increase in costs under the new policy. Amazon, Microsoft, and Meta, among others, rely heavily on the H-1B visa program to bring in skilled workers. In 2025, Amazon alone received over 12,000 H-1B approvals, which at the proposed rate would result in a $3.6 billion increase in costs over three years.

Critics, including Tesla CEO Elon Musk, who once held an H-1B visa, argue that while the program brings in global talent, the new policy could discourage companies from hiring skilled workers. Some companies may turn to local hiring in the U.S., especially if talent and wage costs align.

Global Talent Movement and India’s Role

In light of the higher visa costs, many companies could shift high-value work, including research and development, to countries like India. The long-term implications could see India emerge as a key beneficiary of U.S. policy changes, absorbing the talent that might have otherwise been employed in Silicon Valley.

Mohapatra said, "This change will lead to higher "return to home country" in short term not just for the average IT worker but many highly skilled PhD sorts; India needs to be ready to give them a career or they move to Australia, UK, etc, or worse, lead unhappy careers."

This will also lead to full outsourcing of research functions to countries like India. "20-30% of US semicon talent already exists in India," Mohapatra added.

However, analysts also caution that this move could harm U.S. innovation in the long run. "In the short term, Washington may collect a windfall; in the long term, the U.S. risks taxing away its innovation edge,” said Jeremy Goldman, an analyst at eMarketer.