President Trump has signed a proclamation imposing a $100,000 annual fee on H-1B visa applications, a move set to take effect on September 21, 2025. This represents a significant overhaul of the H-1B visa program, which is heavily utilized by the technology sector. The decision is framed as a crackdown on "systemic abuse" and an effort to protect American jobs and wages. Commerce Secretary Howard Lutnick stated the new fee structure is a deliberate strategy to curb entry-level training roles and prioritize highly-skilled workers.
Impact on Indian IT Firms
Indian IT companies are expected to be significantly affected by this change, as Indian nationals account for the majority of H-1B approvals. These firms, including TCS, Infosys, HCLTech, Cognizant and LTIMindtree, heavily rely on sending junior and mid-level engineers to the U.S. for client projects. The increased cost could impact their business models, which often depend on leveraging a global workforce.
According to one report, the new order would increase the visa fees for these Indian companies from approximately $13.4 million to $1.34 billion. This increase could amount to about 10% of the combined net profits of TCS, Infosys, HCLTech, Cognizant and LTIMindtree in FY25.
Specific Implications
- Increased Costs: The $100,000 fee is in addition to existing application costs, which already range from $1,700 to $4,500. This dramatic increase makes the H-1B program viable only for high-value roles that justify the steep expense.
- Discouraging Entry-Level Positions: The Trump administration aims to discourage companies from using H-1B visas for trainees. Commerce Secretary Howard Lutnick said, "No longer will you put trainees on an H-1B visa – it's just not economic anymore". The focus will shift towards bringing in "great engineers" and "impressively detailed executives".
- Potential for Reduced Applications: While the annual H-1B visa quota remains at 65,000 regular visas and 20,000 for advanced degree holders from U.S. universities, officials anticipate fewer applications due to the high cost.
- Impact on Job Mobility: Experts suggest the increased fee may limit job mobility for Indian tech workers and make renewals more costly. Employers may be hesitant to sponsor or retain H-1B employees, especially those in early-career positions. This could lead some to return to India or seek opportunities in other countries like Canada, the UK, the UAE, and Saudi Arabia.
- Shares Tumble: Following the announcement, shares of Infosys and Wipro listed in the U.S. experienced a sharp decline.
Broader Context
This move is part of a broader effort by the Trump administration to tighten legal immigration. The administration argues that the overhaul will protect U.S. workers, strengthen wage standards, and close loopholes in the H-1B process. However, concerns have been raised by business groups, tech leaders, and immigration advocates, who warn that the steep fee could turn the H-1B into a "luxury work permit," accessible only to the wealthiest corporations and workers. Some experts believe that the policy could sideline startups and smaller businesses, push skilled talent to other countries, and weaken the United States' position as a global innovation leader.
The Trump administration is also planning to launch a $1 million "gold card" visa for wealthy foreigners.
