Donald Trump’s sticker shock on H-1B visas risks disrupting Indian tech firms’ US projects, and is forcing Prime Minister Narendra Modi to once again deal with the fallout from America First policies.
The US president’s order on Friday – which requires a US$100,000 fee for H-1B applications – will hurt margins of Indian outsourcers who use the programme to deploy engineers to client sites.
That is a blow to India’s US$280 billion IT services sector, which is already grappling with sluggish growth as customers cut back on technology spending owing to geopolitical tensions and Trump’s tariffs.
The changes to the visa policy increase strains on the India-US relationship and come on the eve of the Indian team’s visit to Washington as they seek to make a breakthrough in trade talks. They also add to a wave of anti-immigration movements across the globe that have impacted the world’s most populous nation.
Trump’s move is a “geopolitical turf war”, said Chander Prakash Gurnani, the former CEO of Tech Mahindra, who now runs an artificial intelligence firm. “The messaging is – foreign students are not welcome, foreign workers are not welcome, we will impose whatever rules we want and we will not be consistent with them.”
The H-1B visa programme is used heavily by Indian outsourcing firms as well as the US tech sector to bring in skilled workers from abroad. Finance companies and consulting firms also use the programme, which makes tens of thousands of visas available via a lottery.
