NEW DELHI: The Trump administration’s move to impose a $100,000 annual fee on H-1B visa holders is a decision taken at the intersection of politics, economics, and global competition.
It is certainly framed as a tough measure to rebalance the American labour market, tinged with immigration nationalism.
But the proposal may also prove to be a high-stakes gamble that could undercut US technological leadership, dent foreign relations and force companies to rethink their long-term strategies.
The H-1B visa programme has been a longstanding pathway for American companies to hire foreign workers in specialised roles, particularly in science, technology, engineering, and mathematics (STEM). Each year, 65,000 regular H-1B visas are issued, with an additional 20,000 reserved for those with advanced degrees from the US institutions.
The demand has far outpaced supply for years as the visa lottery system got flooded by applications from employers seeking talent that remains in short supply domestically.
The following numbers tell their own story.
In 2024, Indian nationals accounted for a staggering 71% of all H-1B visa beneficiaries, with China a distant second at 11.7%. In the first half of 2025, Amazon and its cloud arm AWS secured approvals for more than 12,000 H-1B workers. Microsoft and Meta each topped 5,000.
These are by no means any fringe hires. They are critical engineers, data scientists, and infrastructure architects driving next-generation platforms in AI, cloud computing, and enterprise software for the US.
So when US Commerce Secretary Howard Lutnick announced that “all the big companies are on board” with a $100,000 fee per worker, per year, it sent immediate shockwaves through the industry.
Markets responded immediately.
Shares of Cognizant, an IT services firm reliant on H-1B workers, dropped nearly 5%. Infosys and Wipro, two Indian tech giants with large US footprints, saw their US-listed shares fall by 2 to 5%.
Yet the broader implications go beyond market jitters for sure. This policy would effectively triple the cost of employing an H-1B worker for the duration of their stay, often between three and six years.
While some large firms might absorb these costs, startups and mid-sized tech companies could be forced to slow hiring, reallocate work abroad, or pause key projects altogether.
This would also mean the underlying political message is deterrence. That foreign talent, no matter how qualified, comes with a heavy price in the US, for long touted as the land of opportunities.
This doesn't mean that H-1B was flawless. Some employers, particularly outsourcing firms, have used the visa to import large numbers of workers at below-market wages.
This has distorted labour markets and disadvantaged American workers, particularly recent graduates struggling to enter high-tech fields.
For them, the fee is not punitive; rather, it is corrective. It compels firms to reconsider their overreliance on foreign workers and incentivises investment in domestic talent pipelines.
But the trade-offs are stark. Over the past two decades, the number of foreign-born STEM workers in the US more than doubled, even as total STEM employment increased just 44.5%. That imbalance reflects a structural shortage. And this is not a temporary hiring preference. There aren’t enough trained American workers to fill the roles in the fast-scaling sectors like artificial intelligence, cybersecurity, and software engineering. Until that changes, foreign talent remains indispensable, not optional.
The timing is particularly sensitive. The United States is in a high-stakes global race for AI dominance, facing escalating competition from China, whose centralised approach to industrial policy and long-term planning presents a serious challenge. For many, access to the world’s top technical talent is America’s ace. Curtailing that access risks undermining the very advantage the US holds.
The policy could also add to the existing geopolitical tension.
India has long been one of the United States’ most important technology partners. With Chinese-US relations in a deep freeze, Washington has leaned heavily on New Delhi. India’s rise as a digital power has been supported, in part, by its deep integration with the US tech industry through the H-1B pipeline. Penalising that relationship now could send another conflicting signal to India.
Complicating matters further is a parallel proposal: a so-called “gold card,” which would offer permanent residency to foreigners willing to invest $1 million in the US economy. This bifurcation of immigration policy, welcoming the wealthy while taxing the skilled, has raised eyebrows.
It risks creating the perception that merit is secondary to capital, a sharp departure from America’s traditional framing of itself as a magnet for talent, not just money. In fact, it smacks of immigration nationalism.
It’s not unreasonable for the government to examine how temporary visa programs impact domestic labour. Nor is it irrational to ask whether companies have become too dependent on external hiring to the detriment of local capacity-building. But policy needs to be proportional and future-facing. A blunt $100,000 fee risks becoming a barrier, not a balancing tool.
There is also the issue of legality. Critics argue that the proposed fee structure could exceed the government’s authority under current law, which permits visa-related fees only to cover the cost of application processing—not as a revenue-generating mechanism. That could open the door to legal challenges.
The H-1B program represents more than just labour mobility. It is a symbol of America’s role in the global knowledge economy. Tinkering with it has consequences far beyond payrolls or campaign slogans. It affects how the US is perceived by investors, innovators, and allies.
As global competition for talent intensifies, the question is no longer whether the US can attract the world’s best minds. It’s whether it chooses to.