The United States will now levy an application fee of approximately 88 lakh rupees (one lakh dollars) annually for the H-1B visa. On this fee increase, IIT-Madras Director, V.G. Kamakoti, stated that we should thank US President Trump for it. He views it as a blessing and believes we should take full advantage.
President Donald Trump signed the bill at the White House. Previously, the average cost for an H-1B visa was approximately 6 lakh rupees, valid for three years. It could be renewed for another three years upon paying the fee. Considering the new annual fee of 88 lakh rupees, the total cost for an H-1B visa in the US would now be approximately 5.28 crore rupees over six years.
Discussing the impact of the H-1B visa fee hike, Kamakoti Veenathan stated that it has a dual impact: First, students who go from here to work there may not go now, and as the Director of IIT-Madras, he is happy that they will stay in India. He believes that as a country, they have excellent opportunities for research here. This is the time when students who want to go to the US can contribute by staying here. Over the past 5 years, at IIT-Madras, only 5% of their population has been outside India. The craze for going to America has ended.
The new fee structure could significantly impact the business models of domestic Information Technology (IT) companies. This could lead companies to avoid new applications and focus on foreign supply or local hiring. A report from financial consultant Motilal Oswal Financial Services indicates that if a company applies for 5,000 H-1B visas when the decision is implemented from 2027, the fee burden alone will be 500 million dollars.
The consulting firm said that, considering this fee burden, it is possible that Indian IT companies will refrain from new H-1B applications. Instead, they are likely to emphasize increasing offshore supply or local hiring. Offshore supply means providing services to American companies through professionals located in India or other low-cost countries.
However, if new H-1B visa applications decrease or companies distance themselves from them, income from on-site (in the US) work may decline. But one effect will also be that the cost of on-site employees for companies will also decrease. In this situation, although the revenue of Indian IT companies from the US business may decrease, their operating margin may improve as on-site costs also decrease.