The potential changes to the H-1B visa program under the new administration of Donald Trump have left IT professionals and hirers wondering what lies ahead
On a pleasant January morning in Bengaluru, known globally as the Silicon Valley of India, US Ambassador to India Eric Garcetti opened a new consulate, the fifth in the South Asian nation. In three days, the Joe Biden appointee would step down, paving the way for the Trump 2.0 administration to choose his replacement.
Speaking at the event, Indian External Affairs Minister S. Jaishankar called it a “new milestone” in bilateral relations, particularly in sectors like technology, space, defense, and education. “As we enter an era of AI, EVs, drones, biotechnology, and advanced space exploration, our partnership will increasingly be defined by innovation. Bengaluru, as India’s tech capital, and [the state of] Karnataka, as a hub of innovation, will play crucial roles in this journey,” Jaishankar said.
Three days later, on January 20, he would be attending the swearing-in ceremony of US President Donald Trump in Washington, DC. Later, he would engage the newly appointed US Secretary of State Marco Rubio on the issue of “irregular immigration” and visa policy regarding the millions of Indian professionals in the US.
On that January day, around 8,000 miles away, in a Boston suburb, N. Ranganathan, a 36-year-old software techie working as a software analyst, was visibly upset with a leading aircraft manufacturer. He, his wife and their three-year-old son were in for a hard realization about the US being “a land of dreams.”
US President Donald Trump began his term in office with sweeping executive orders, including one ending birthright citizenship for children whose parents are neither American citizens nor permanent residents. This could affect over a million Indians waiting for green cards – with some of them locked in a bureaucratic backlog for a decade.
However, broader concern over Trump’s visa policies during his second term is something that is being discussed both among the diaspora in the US and back in Bengaluru and other Indian tech hubs.
India’s $250 billion IT outsourcing industry is at a critical juncture – and the rise of Artificial Intelligence (AI) is not the biggest challenge.
The H-1B debate
In December, social media was boiling after billionaires Elon Musk and Vivek Ramaswamy defended the tech industry’s need to bring in foreign workers. Their statements sparked an online spat between anti-immigration Trump loyalists and the tech-oriented conservative faction.
The US tech industry, which is facing layoffs, relies on the H-1B visa to bring in thousands of IT professionals – mainly from India (over 72%), as well as China and other nations. Supporters claim that H-1B workers address essential skill shortages and foster innovation, while opponents argue that the program keeps wages low and displaces US employees.
Musk, who himself is a South African immigrant who once held an H-1B visa, said he was in favor of bringing “the top ~0.1% of engineering talent” via a legal route as it is “essential for America to keep winning.” He also told critics to “go f*** yourself in the face,” referring to them as “subtards.”
The online standoff came days after the US Department of Homeland Security (DHS) issued a rule aimed at ‘reforming’ the H-1B program to help American companies address critical workforce shortages. The new rule looks to simplify the approval process, enhancing flexibility for employers to retain skilled workers, and strengthen the program’s oversight and integrity.
Additionally, on December 27th, the US Department of State announced the completion of a successful pilot program to let people renew H-1B visas without having to leave the country. This pilot program streamlined the renewal process for thousands of applicants, the Department of State said, promising to establish a US-based renewal program in 2025.
At around the same time, President Trump announced the appointment of Sriram Krishnan, an Indian-born venture capitalist, to lead artificial intelligence policy. In the past, Krishnan had supported the removal of country caps on green cards for skilled immigrants in the US.
The war of words on H-1B was not limited to social media. There have been racist attacks against Indians on the TV and in real life. Fox News carried an interview with a commentator who openly referred to Indians as “third world parasites.”
Immediately after the online fracas between Musk and other MAGA supporters, Trump came to Elon’s defense. In an interview with the New York Post, he praised the use of visas to bring skilled foreign workers to the US. “I’ve always liked the visas, I have always been in favor of the visas. That’s why we have them,” Trump said.
Speaking at a press conference at the White House after taking office, Trump said “I like both sides of the argument, but I also like very competent people coming into our country, even if that involves them training and helping other people that may not have the qualifications they do,” he said while addressing a joint press conference at the White House with Oracle CTO Larry Ellison, Softbank CEO Masayoshi Son, and Open AI CEO Sam Altman.
“We have to have quality people coming in. Now by doing that, we’re expanding businesses and that takes care of everybody. So I’m sort of on both sides of the argument, but what I really do feel is that we have to let really competent people, great people, come into our country. And we do that through the H-1B program,” he added.
This marked a U-turn on H-1B visas for Trump; in 2016 he called them "very, very bad” for American workers. Months before the end of his first term as president in 2020, he imposed a temporary ban on the visas, which was later struck down by a federal court.
The H-1B visa program, which started in 1990, is a non-immigrant visa that allows US companies to employ foreign workers in occupations that typically require a high level of technical expertise (fields such as IT, engineering, and healthcare). The visa is initially granted for three years, and can be extended by another three years. Every year, 85,000 such visas are up for grabs, through a lottery system.
Major tech companies, including Amazon, Microsoft, Apple, Meta, Google, Qualcomm Technologies, Ernst and Young, as well as outsourcing companies such as Tata Consultancy Services, Infosys, Wipro, Cognizant Technology Solutions, Deloitte Consulting, HCL America and others heavily rely on H-1B visas.
Indian companies, who swarmed the US in large numbers at the height of the dotcom boom-in the 1990s are the biggest beneficiaries of H-1B visas.In May 2024, according to US State Department data from 2022, as much as 77% of 320,000 H-1B visa applications went to Indians.
TCS CEO Krithivasan told Moneycontrol that a decrease in H-1B visas can be offset by other strategies, such as relocating work to India, reducing the overall reliance on H-1B.
From the first time Trump took charge in 2016, the US authorities have clamped down on frauds related to applications from H-1B, increased the cost of filings [upwards of $8,000] and even limited repeated filings, in an effort to make the system fair. As a result, people can no longer submit multiple applications to increase their chances of winning the lottery, as this creates an unfair advantage.
Since December, both Musk and Ramaswamy, whom Trump has tasked with cutting government spending in his new administration, seem to have offered their position on H-1B visas. Following the backlash, the tech barons have said that the program needs a fix. “Easily fixed by raising the minimum salary significantly and adding a yearly cost for maintaining the H-1B, making it materially more expensive to hire from overseas than domestically. I’ve been very clear that the program is broken and needs major reform,” Musk said days after telling critics to “go f*** yourself.”
Immigrant attorneys believe that unlike the past, this time things may actually change. “The system is broken and it needs to be fixed, especially around the area of what is considered to be a job/service that cannot be done by a local and requires a special visa,” an attorney from a Washington-based law firm told RT.
Industry watchers believe that H-1B visas can still address the basic issues which led to its creation in the first place, i.e. supplying engineers to met tech’s gargantuan demands. “The H-1B program, which is based on numerical limits set over 30 years ago, still remains terribly short of meeting the needs of the US economy in the global competition for talent, particularly in STEM fields,” believes Ashank Desai, Principal Founder and former Chairman of Mastek as well as founding member of Indian software lobby firm NASSCOM.
Ganesh Natarajan, Executive Chairman and Founder of 5F World, and formerly CEO of Zensar, a Pune-based outsourcing firm, told RT the H-1B mindset needs to change “from wage arbitrage to quality of talent. In many ways, it needs to evolve.”
Ultimately, the next move of the Trump administration will significantly impact India’s exports. According to the Ministry of Commerce and Industry, India’s total exports reached $776.68 billion in fiscal year 2023-24. Software exports alone account for about 4% of the country’s GDP and generate approximately 5.4 million direct jobs and nearly 20 million indirect jobs. Therefore, any changes to visa policies are likely to affect India’s export landscape.
