A seismic proposal from former US President Donald Trump is causing ripples across the global tech industry: hiking the H-1B visa application fee to a staggering $100,000. The stated goal is to force American companies to prioritize local talent. But will this “America First” policy work as intended?
The H-1B visa has long been the golden ticket for thousands of Indian tech professionals seeking a career in Silicon Valley. This proposed change has sent waves of anxiety through India’s IT sector, which heavily relies on this visa program. On the surface, the logic is simple: make foreign labor prohibitively expensive, and companies will hire Americans.
To understand the real-world economic chain reaction, we spoke with Vinod Nair, Head of Research at Geojit Financial Services. His analysis suggests the policy could trigger unintended consequences that run counter to its primary goal.
The Initial Shock: A Massive Financial Barrier
Nair’s analysis begins with the immediate impact of such a drastic fee hike. “A $100,000 fee per visa would be a massive financial barrier,” he explains. “For Big Tech giants like Google or Microsoft, this might be an absorbable cost for truly indispensable, top-tier talent. But for the vast majority of companies—mid-sized firms, startups, and even large corporations looking to fill multiple roles—it becomes untenable.”
This is the core of the argument to boost local hiring. By creating such a high cost, the policy would effectively choke off the H-1B visa as a standard route for sourcing skilled tech workers, theoretically compelling companies to invest more in the domestic US talent pool.
The Deeper Reality: The Skills Gap and the Offshoring Pivot
However, Nair cautions that this view overlooks a critical reality: the persistent skills gap in the United States, particularly in high-demand, specialized fields.
“The H-1B program isn’t just about finding cheaper labour; it’s often about finding available labour with very specific skills in AI, machine learning, and quantum computing that are in short supply locally,” Nair clarifies. “You cannot create a qualified AI expert overnight simply by raising a visa fee. The talent pipeline takes years to build.”
This brings us to the central question: Can Trump’s $100,000 H-1B visa fee hike boost local hiring? According to Geojit’s Vinod Nair, it’s more likely to do the opposite by forcing companies to make a simple economic choice. If they cannot bring the talent to the work, they will move the work to the talent.
“This policy could be the single biggest catalyst for offshoring we’ve seen in a decade,” he warns. “Instead of paying $100,000 to bring one engineer to California, a company could use that same money to set up a small, highly skilled team in Bengaluru, Hyderabad, or Pune. The economics are undeniable.”
In this scenario, the policy backfires spectacularly. Rather than creating jobs in the US, it fuels the growth of high-value tech jobs in India and other global hubs. US companies would retain access to the talent they need, but the jobs would be geographically distributed, accelerating a trend already supercharged by the shift to remote work.
Impact on Indian IT Services Giants
For Indian IT firms like TCS, Infosys, and Wipro, the change would be a double-edged sword.
- The Challenge: Their traditional onsite deployment model, which relies heavily on H-1B visas, would face an existential threat. “They would have to radically accelerate their localisation strategies, hiring more talent directly in the US,” Nair notes.
- The Opportunity: The business case for their Offshore Development Centers (ODCs) in India would become massively stronger. Clients would be more inclined than ever to opt for projects managed entirely from India to avoid the hefty visa fees.
In conclusion, Vinod Nair’s analysis suggests that Trump’s proposal is a high-stakes gamble. While framed as a tool to protect American jobs, it could inadvertently starve innovative US startups of essential talent while pushing large corporations to double down on offshoring—ultimately strengthening India’s position as a global tech powerhouse. The policy aims to build a wall, but in today’s borderless digital economy, it might just reroute the workflow.
