The United States has introduced a significant increase in the H-1B visa application fee, now costing approximately 88 lakh rupees (around $100,000) annually. V.G. Kamakoti, the Director of IIT-Madras, expressed his approval of this change, stating that President Trump should be thanked. He views this as a beneficial situation and an opportunity to be embraced.
The fee increase was enacted by President Trump at the White House. Previously, the cost for an H-1B visa was about 6 lakh rupees, valid for three years, with an option to renew for an additional three years upon payment. The new fee structure results in a total cost of roughly 5.28 crore rupees over six years for an H-1B visa in the US.
Commenting on the consequences of the fee hike, Kamakoti Veenathan highlighted two key impacts. Firstly, students intending to work in the US may opt to stay in India, a scenario that is welcomed by the Director of IIT-Madras, who believes there are abundant research opportunities within India. He suggests this could be an ideal time for students who aspire to work in the US to contribute to the country. He noted that in the last five years, only a small fraction (5%) of IIT-Madras’s population has been based outside India, signifying a decline in the interest in moving to America.
Reports indicate that the fee hike could greatly influence the operational strategies of domestic IT companies, possibly leading them to reconsider new H-1B applications in favor of approaches such as offshore outsourcing or local recruitment. A financial consultancy, Motilal Oswal Financial Services, estimates that a company applying for 5,000 H-1B visas after the implementation of the decision in 2027 would bear a fee burden of 500 million dollars.
Consultants believe Indian IT firms might steer clear of new H-1B applications due to the higher fees. This could encourage them to concentrate on expanding offshore operations or hiring locally. Offshore supply involves providing services to American firms through professionals in India or other cost-effective nations.
Although this could lead to a decrease in income from on-site operations in the US, it may also reduce the expenses associated with on-site staff for these companies. Therefore, while the revenue from the US market might decrease for Indian IT companies, their overall operational margins might improve as on-site costs decrease.