India warns U.S. H-1B fee hike could dent exports and remittance

India’s Ministry of Economic Affairs has warned that a new one-time $100,000 H-1B visa fee on fresh petitions in the United States 🇺🇸 could slow IT services exports and reduce remittance inflows. Indian nationals make up the bulk of H-1B professionals in the American labor market, so the ministry’s internal assessments indicate the jump from earlier H-1B fee levels—previously in the $1,500–$4,000 range—could alter hiring plans, delivery models, and pricing for Indian technology firms that depend on on-site staff to serve U.S. clients.

Officials said the change applies only to new H-1B visas, not renewals or existing holders. That narrow application still matters for Indian IT companies, including large exporters such as Tata Consultancy Services and Infosys, which routinely seek new on-site H-1B approvals to start or scale contracts. According to analysis by VisaVerge.com, India’s exposure is high because H-1B demand aligns with the country’s deep pool of engineers, and companies often mix onshore and offshore teams to meet client needs.

In 2024, analysts estimate that 71% of new H-1B approvals were for Indian nationals, underscoring India’s dependence on this work route. That share reflects long-running hiring patterns in cloud services, enterprise software, consulting, and semiconductor-related roles, where U.S. employers have leaned on H-1B hiring to address shortages. Economists note that America’s STEM workforce draws heavily on foreign-born talent, especially at the doctoral level, and H-1B holders contribute to patent output, tax revenues, and productivity gains in critical industries.

The ministry’s note points to a $181 billion IT and software export sector that could feel the policy shift first. If the new H-1B visa fee endures, forecasters say growth in services exports may slow. Some houses now see FY26 IT export growth falling under 4%, down from earlier 5% projections, and warn that longer-run growth could dip below the previously expected 7% compound pace. While these are estimates, policymakers say they reflect the real possibility that firms will pare back new U.S. placements due to higher upfront costs on each new petition.

Policy context and early effects

The fee change lands amid already tight H-1B supply rules and strong employer demand. While large U.S. tech firms may absorb the cost or move more roles abroad, the ministry cautions that startups and mid-sized companies—both in the U.S. and India—may struggle.

Key near-term concerns:
– Export growth slowdown: Projections for FY26 IT services exports now trend below prior forecasts, and multi-year growth could cool if the fee stays in place.
– Remittance risk: With fewer fresh H-1B roles, fewer Indian workers could access higher U.S. salaries, which may lower remittance inflows.
– Cost pass-through limits: Clients may resist higher rates tied to visa costs, pushing firms to rethink staffing models rather than pass along the entire fee.
– Wider policy risk: The fee hike highlights how trade and immigration rules can affect sectors once seen as insulated from such shocks.

Officials added that the immediate revenue hit to major Indian IT firms may be limited, as many can pivot to remote delivery or near-shore models. However, if the H-1B visa fee remains high for a long period, it could reshape deal structures and delivery plans. Companies may expand global capability centers (GCCs) for clients who want dedicated teams but prefer lower-cost hubs outside the U.S., including in India’s tier-2 cities and other offshore locations.

India has begun outreach to the U.S. administration and industry groups, seeking reconsideration or relief. The ministry’s engagement includes discussions about the policy’s ripple effects on both economies. Policymakers are also listening to employers who say the fee could push some work away from the U.S., limiting America’s access to skilled talent and, in turn, affecting downstream innovation.

Industry response and risks

Executives across India’s top exporters, including Tata Consultancy Services, are weighing options to smooth delivery if on-site roles become harder to justify. The common playbook includes:

1. Rebalancing project teams toward offshore or near-shore hubs when client rules allow.
2. Prioritizing only the highest-value on-site roles for new H-1B filings.
3. Shifting urgent projects to U.S. citizens and permanent residents when available.
4. Exploring internal transfers using alternative global locations where client proximity remains essential.

For smaller vendors, the math is tougher. A mid-sized services firm that typically files a handful of new H-1B petitions each year could see a sharp jump in upfront costs. If a U.S. client won’t accept higher rates, the project may move offshore or go to a competitor with deeper pockets.

Potential outcomes for smaller firms and workers:
– Fewer international placements for young Indian engineers.
– Slower career progression for workers who rely on on-site U.S. experience.
– Lower household remittances in states that have long benefited from tech inflows.
– Local economic impacts for training centers, housing near IT parks, and supporting services.

India’s ministry emphasized it will track impacts on both export earnings and remittances. The note frames the fee hike as a reminder that policy shifts can ripple through global value chains. For India, a country that built a world-class export engine around cross-border tech services, that means planning for delivery models that are less exposed to sudden rule changes in one market.

“The fee hike is a reminder that policy shifts can ripple through global value chains.”
— Ministry of Economic Affairs (paraphrased summary of the note)

Practical details for workers and employers

Employers file H-1B petitions using Form I-129; if they choose faster processing, they may add Form I-907 for premium processing. Both forms are filed by the employer, not the worker.

• Workers should consult their company’s immigration counsel before making travel or job decisions tied to visa timing.
• Some U.S. firms may accelerate hiring in Canada or expand contractor pools abroad to keep projects moving while limiting new H-1B exposure.
• Indian firms may invest more in training and automation to raise offshore delivery quality, easing pressure to place staff on-site.

Analysts caution against panic. The near-term financial effect on large exporters could be muted because many contracts already assume a mix of locations, and pricing for premium skills—like cybersecurity, AI/ML, or ERP transformation—can help cover higher costs. Still, there is a ceiling to what clients will accept, and the fee’s size forces fresh cost-benefit checks on every new on-site role.

For families, the human stakes are plain. If new placements shrink, fewer engineers may start U.S. careers right after graduation. That delays earnings, savings, and remittances that often support parents and siblings at home. It also affects local economies that grew around this global flow—from coaching centers to housing near major IT parks.

Outlook and next steps

India remains hopeful that talks with Washington and industry partners will produce a rethink or some relief. Until then:

• Exporters are drawing up backup plans.
• Policymakers are watching quarterly numbers for clearer patterns.
• Hiring plans at companies like Tata Consultancy Services and the career paths of thousands of young engineers could be reshaped depending on the fee’s duration and application.

For official program details, see the USCIS H-1B specialty occupations page: https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations. Employers filing petitions should use Form I-129: https://www.uscis.gov/i-129 and, if needed, Form I-907 for premium processing: https://www.uscis.gov/i-907.