The recent decision by the Trump administration to increase the H-1B visa application fee to $100,000 has triggered a wave of concern among US companies, particularly in the tech sector, and is prompting them to consider shifting more work to India. This move is expected to significantly impact the landscape of global outsourcing and the flow of skilled labor between the two countries.
The H-1B Visa Fee Hike: A Game Changer
On September 19, 2025, President Trump signed a proclamation that will require a $100,000 annual visa fee for highly-skilled foreign workers. Effective September 21, 2025, US companies must pay $100,000 per H-1B application. This represents a substantial increase from the previous fees, which ranged from $2,000 to $5,000, depending on the company size. The H-1B visa program allows US companies to employ foreign workers with specialized skills in fields such as IT, healthcare, and engineering for up to six years. India has been a major beneficiary of this program, with Indian nationals accounting for 71% of approved visas in 2024.
The Trump administration argues that the increased fee is necessary to protect American jobs and prevent companies from using the H-1B program to replace American workers with cheaper foreign labor. The White House claims that the visas were being "abused" to undercut American wages and outsource IT jobs. A White House official clarified that the $100,000 is a one-time fee that only applies to new visas and not to renewals or current visa holders.
Impact on US Firms and the Shift to India
The steep increase in H-1B visa fees is expected to have several consequences for US firms. Firstly, it will raise operational costs, especially for companies heavily reliant on H-1B visas. Secondly, it may force companies to rethink their hiring strategies and explore alternative solutions to address their talent needs.
One such alternative is to shift more work to India, where labor costs are lower and a large pool of skilled professionals is available. India is home to over 1,700 Global Capability Centers (GCCs), which handle operations ranging from finance to research and development. These GCCs have evolved beyond their initial focus on tech support to become hubs of high-value innovation. Trends such as the growing adoption of artificial intelligence and increasing visa restrictions are driving US firms to redraw their labor strategies, with GCCs in India emerging as resilient hubs that blend global skills with strong domestic leadership.
According to Rohan Lobo, a partner and GCC industry leader at Deloitte India, many US firms are already reassessing their workforce needs and have plans underway to shift more strategic, innovation-led mandates to their GCCs in India. This shift is expected to be particularly pronounced in areas such as AI, product development, cybersecurity, and analytics.
India's Perspective and Potential Benefits
The Indian government has expressed concerns about the potential "humanitarian consequences" of the H-1B visa fee hike. However, some experts believe that this move could also present an opportunity for India. By making it more expensive for US companies to hire foreign workers, the fee hike could encourage skilled Indian professionals to remain in their home country, contributing to the growth of India's tech sector.
Vivek Wadhwa, who leads Vionix Biosciences, suggests that this reverse migration would significantly benefit India, as these professionals would bring capital, networks, and the know-how to scale companies globally. Amitabh Kant, the former head of an Indian government-policy think tank, believes that Trump's $100,000 H-1B fee will "choke U.S. innovation and turbocharge India's".
Challenges and Opportunities
While the shift of work to India may offer cost savings and access to talent for US firms, it also presents certain challenges. These include the need for careful partner selection, strong communication protocols, and strict data security measures. Additionally, companies need to navigate cultural differences and ensure seamless collaboration between teams in the US and India.
Despite these challenges, the long-term prospects for increased collaboration between US firms and Indian talent remain strong. The global push for digital transformation, AI, and cloud adoption continues to drive demand for skilled professionals, and India is well-positioned to meet this demand. By leveraging the expertise and cost-effectiveness of Indian talent, US companies can enhance their competitiveness and drive innovation in the global marketplace.
