Last week’s H-1B proclamation sets the stage for months of fierce debate, with tech firms fighting to protect global talent pipelines as critics press for even deeper restrictions.
Silicon Valley is still reeling from last week’s presidential proclamation imposing a staggering $100,000 fee on H-1B visas. Publicly, the reaction from U.S. tech leaders has been muted. Few executives want to risk criticizing Donald Trump, aware that the president treats even constructive dissent as a declaration of war. Some have even applauded the move, framing it as a way to protect American jobs and align themselves with the administration’s agenda.
Behind the scenes, however, frenzied lobbying is underway. Corporate legal teams and industry groups are working overtime to persuade the administration to soften the measure. They already have some results to show.
On Friday evening, the White House initially signaled that the fee would apply to all visas — new and existing — spreading panic among H-1B holders. Many scrambled to return to the U.S. before the effective date, while airlines saw soaring demand and last-minute cancellations. By Sunday, however, the administration clarified that the $100,000 fee would apply only to new petitions, not existing visa holders.
Criticism of the H-1B program has long followed two main lines. Trump and his supporters argue that companies blatantly abuse the program, using it as a loophole rather than a targeted talent pipeline. They also claim it suppresses wages and displaces American workers, with lower-paid foreign employees competing against U.S. graduates.
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The proclamation marks what U.S. officials call the first step toward H-1B reform. The White House announced that the Department of Labor will begin revising and raising prevailing wage levels, with the goal of “upskilling” the program so it supports only the most highly qualified foreign workers.
At the same time, the Department of Homeland Security (DHS) is preparing to restructure the H-1B lottery, prioritizing higher-paid, highly skilled applicants over those at lower wage levels.
This sets the stage for months of heated debate. Tech companies, who rely heavily on global talent, will push back against measures they see as punitive, while critics of the program will seize the opportunity to demand deeper cuts.
Some politicians are already calling for more restrictions on global talent. Senator Chuck Grassley of Iowa, a longtime H-1B critic, urged DHS to halt work authorizations for international students graduating from U.S. universities.
In a social media post on Tuesday, Grassley, the president pro tempore of the U.S. Senate, argued that foreign students compete directly with Americans and warned that their presence “puts the country at risk of tech and corporate espionage.”
DHS needs 2 stop issuing work authorizations 2 student visa holders who compete against Americans It’s in direct violation of law &puts USA at risk of tech and corporate espionage I sent a letter 2 DHS Scty Noem asking her to end work authorizations 4 foreign student visa holders
— Chuck Grassley (@ChuckGrassley) September 23, 2025
If more restrictions on the visa program are placed, it would have a severe impact on India. No country depends more on H-1B than India, whose nationals consistently account for more than 70 percent of annual approvals.
The program has shaped India’s economic trajectory in three important ways.
It directly led to the spectacular growth of the Indian IT Industry, with Indian outsourcing giants like Infosys, TCS, and Wipro having long been among the heaviest users of H-1B visas. The steady flow of Indian engineers to the U.S. fueled the rise of a $300 billion IT services industry back home, creating jobs within India.
Secondly, it has filled the country’s coffers. By conservative estimates, between one and two million Indians have received H-1B visas since the program’s creation in 1990. Today, Indian workers in the U.S. send back more than $30 billion annually in remittances, supporting families and bolstering India’s economy.
Finally, the H-1B pipeline helped expand the U.S. Indian American community which has grown into a small but potent political force. Their financial and intellectual contributions have become a bridge between Washington and New Delhi, deepening bilateral ties.
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Of course, the biggest beneficiary of H-1B has been the United States itself. The program has contributed significantly to the backbone of Silicon Valley’s talent pool. Behind many of America’s most iconic innovations — from semiconductors to social media — there has been the hand of an Indian-born engineer or executive.
The new $100,000 fee and further restrictions that are being discussed threaten to disrupt this talent pipeline. Companies may find it prohibitively expensive to hire foreign talent, forcing them to scale back or outsource more work overseas. Startups and mid-sized firms, in particular, could be priced out of the global competition for skills.
A recent JPMorgan Chase report projected that the fee could lead to 5,500 fewer H-1B applications every month. It could also discourage foreign students from pursuing U.S. education, further shrinking the talent pool for American companies.
For the U.S., the policy could undermine its global competitiveness. Tech executives quietly warn that if hiring foreign workers becomes too expensive, companies will accelerate the trend of establishing Global Capability Centers (GCCs) in India and other nations, shifting high-value work abroad instead of creating jobs in America.
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For India, the proclamation represents a “double whammy.” Economically, it will hurt its largest export market, coming on the heels of the administration’s 50 percent tariff on Indian goods. Diplomatically, it risks straining U.S.-India relations at a time when Washington views New Delhi as a key partner in countering China and securing technology supply chains.