Donald Trump’s new executive order imposes a $100,000 fee on H-1B visas, threatening India’s $280 billion IT exports and making it harder for TCS and Infosys to operate.
Trump sharply raises H-1B fees: a blow to Indian outsourcers
Donald Trump’s executive order has imposed a new fee of $100,000 for each H-1B visa application. This threatens the Indian IT outsourcing model, which has grown into a $280 billion industry, providing US corporations with personnel from TCS to Walmart. Shares of Tata Consultancy Services and Infosys fell more than 3%.
Political and economic context
Washington justifies the move by fighting “abuses,” but experts call it a political maneuver before the elections. This is a new challenge for India: tens of thousands of engineers work in the US every year under the H-1B program, and 72% of visas are for Indian specialists.
The opposition accuses the Modi government of inaction, while Indian social networks have exploded with panic – families fear losing sources of income and the opportunity to stay in the US.
Risks for the US
American corporations, from Microsoft and Google to Goldman Sachs, warn of rising costs and risks for projects. Business may accelerate the creation of “global centers of competence” in India, where labor is cheaper.
What’s next
Lawyers are already predicting lawsuits, as the new order may contradict US immigration law. Bloomberg Intelligence analysts believe that companies such as TCS, Infosys and Cognizant will have to rebuild their business models: either more expensive onshore consulting in the US or more massive offshore projects in India.
