The recent changes to the H-1B visa program in the United States, specifically the proposed wage-based selection system and increased fees, have sparked considerable debate and concern within the Indian IT sector. While these changes pose challenges, a closer look reveals that they may not be entirely detrimental and could even present some opportunities for Indian IT companies.
The primary concern stems from the potential impact on entry-level Indian IT professionals. The US Department of Homeland Security (DHS) has proposed a weighted selection system that prioritizes higher-paid applicants when demand for H-1B visas exceeds the annual quota of 85,000. This "weighted lottery" approach would give applicants with higher wage offers a greater chance of selection. Additionally, a recent proclamation imposed a $100,000 fee on H-1B petitions filed after September 21, 2025.
Critics argue that these changes could hurt entry-level talent, particularly from India, as companies may be less inclined to sponsor visas for lower-paid positions. Some experts believe that a wage-based lottery system would decrease the overall demand for skilled immigrants, disproportionately affecting those in entry-level positions. A Silicon Valley-based immigration lawyer noted that the overhaul proposal stands to affect entry-level foreign workers the most. The Heritage Institute, a conservative think tank, has pointed out that many H-1B positions are filled by entry-level workers from India and China earning below-median wages.
However, the situation is not as bleak as it may seem. Firstly, the proposed changes to the H-1B allocation system do not mean that visa allocation would be solely based on salary. The DHS has stated that the process would maintain opportunities for employers to secure H-1B workers at all wage levels. Secondly, early analysis suggests that Indian IT companies are adaptable and may even benefit from the new system. The weighted selection system considers skills, seniority, and location in addition to high salaries for H-1B visa allocation. This broader approach could allow companies to strategically deploy their workforce and focus on high-value, specialized roles that command higher salaries.
Moreover, the increased costs associated with H-1B visas may incentivize Indian IT firms to invest more in local hiring in the US and expand their global capability centers (GCCs) in India. Nasscom, India's top IT industry body, has stated that Indian companies have been steadily reducing their reliance on H-1B visas through increased local hiring in recent years. Some experts suggest that the disruption in the H-1B visa policy could serve as an opportunity for India to stem the brain drain and encourage skilled professionals to stay and work in their home country.
The increased H-1B costs could also lead to a greater emphasis on offshore and remote delivery models. With the $100,000 H-1B fee making onsite deployment more expensive, Indian IT firms may double down on providing services from India, reserving US postings for only mission-critical roles. This shift could benefit the Indian IT sector by creating more job opportunities within India and boosting the country's services exports.
Furthermore, other countries, such as Germany, Canada, and the UK, are actively seeking to attract skilled Indian talent with streamlined visa programs and incentives. This diversification of opportunities could mitigate the impact of the H-1B changes on Indian IT professionals, as they may find attractive career prospects in other developed nations. A Canadian policy organization has suggested that attracting US H-1B professionals with high earnings could generate billions in economic activity.
In conclusion, while the wage-based H-1B system and increased fees present challenges for Indian IT, they are not all bad news. The Indian IT sector has demonstrated its adaptability and resilience in the past, and these changes could spur innovation, encourage local hiring, and promote the growth of the IT industry in India.
