Indian workers face H-1B crisis as Trump unveils $100,000 visa fee

President Donald Trump’s H-1B visa fee has sent shockwaves through India’s workforce, which makes up roughly 70% of recipients.

On today's Big Take Asia Podcast, host K. Oanh Ha and Bloomberg’s Sankalp Phartiyal unpack how the policy could disrupt careers, reshape global talent flows and shatter the American dream for tens of thousands of workers.

Here is a lightly edited transcript of the conversation:

K. Oanh Ha: Ayush is an IT consultant in his early 30s from India. He lives in the US with his wife and he told Bloomberg’s Sankalp Phartiyal that they like it there.

Sankalp Phartiyal: He and his wife have been in the US for very many years. They work for an IT company, and they love working for that company. The environment in that company is great.

Ha: Last month, Ayush was in India visiting family. But the day before he was due to return to the US, he woke up to a bunch of missed calls and frantic text messages from friends.

Phartiyal: Friends saying, where are you? Come back immediately. Did you see the news?

Ha: Ayush and his wife are recipients of one of the most coveted visas in the world. The H-1B. That allows highly-skilled foreign nationals to live and work in the United States. And on that morning the news was about a major overhaul of that program –

Tim Stenovec: The president is said to add a new $100,000 fee for H-1B visas in the latest crackdown.

Ha: $100,000 – more than 10 times what the visa had cost in the past. The news sent hundreds of thousands of H-1B visa holders worldwide into a spiral. It wasn’t clear who the new fee applied to, or whether current visa holders – like Ayush – would be charged upon reentering the US.

TikTok user: If you know anyone who’s on H-1B in India right now, tell them to board the flight as soon as possible...

TikTok user: I’m so mad and frustrated right now. If you are currently in the US on the H-1B visa working as a foreigner, do not leave this country..

Ha: President Donald Trump’s announcement of the new fees was especially unsettling for the Indian community. That’s because Indians make up roughly 70% of H-1B holders. Ayush didn’t want to speak to us on tape out of fear that it would jeopardize his career. But he’s agreed to let Bloomberg’s Sankalp Phartiyal tell his story instead.

Phartiyal: He told me that he was in the line for immigration just a few minutes before the deadline kicked in on September 21. Thankfully he is admitted in.

Ha: For decades, the H-1B program was a way to address labor shortages in the US. The vast majority of H-1B holders work in the tech sector – for the likes of Meta, Infosys and Google’s parent company Alphabet.

Phartiyal: A lot of very famous people in the US have come to the US on H-1Bs – Elon Musk being one of them. The current Google, CEO Alphabet, CEO Sundar Pichai.

Ha: In the past, an H-1B visa would set companies back several thousand dollars – for the application fee and subsequent costs. But as of September 21 – any new applications for the work visa will carry a $100,000 fee. Here’s US Secretary of Commerce Howard Lutnick:

Howard Lutnick: So the whole idea is no more will these big tech companies or other big companies train foreign workers. They have to pay the government $100,000, then they have to pay the employee. So it's just not economic.

Ha: Sankalp says this was the last straw for Ayush and his family. He’s now decided to leave the US and is looking for jobs in Europe.

Phartiyal: The US is now not a place they want to be in. This is not the fear that they want to live with. That we’ll be kicked out or we won't be admitted in. He says that, I'm not really sure, you know, Trump is unpredictable. What if he wakes up tomorrow morning with a cup of coffee, changes the rules and says, okay, this rule applies to even existing H-1B visa holders. I just do not want to live with that stress. It's okay. I will earn less money somewhere else, but at least I'll be happy.

Ha: This is the Big Take Asia from Bloomberg News. I’m Oanh Ha. Every week, we take you inside some of the world's biggest and most powerful economies, and the markets, tycoons and businesses that drive this ever-shifting region. Today on the show: the hundred thousand dollar visa. What Trump’s new visa fee means for Indian talent, and could the US’s loss be India’s gain?

Ha: The H-1B visa program was introduced in 1990 to address specific labor shortages. It allows companies in the US to hire college-educated foreign workers for specialized jobs for up to six years. Since H-1B is a dual intent visa, an employer can sponsor the same worker for a green card — which grants them permanent residency — even while the worker is still on the H-1B. Bloomberg’s Sankalp Phartiyal says today more than 60 percent of H-1B visas are used by the tech industry.

Phartiyal: The US companies like Google and Microsoft and Amazon are among the biggest users of H-1Bs, but also Indian outsourcers or IT services companies like Tata Consultancy Services or Infosys, are big users. The way it works is that companies see a requirement for specialized, let's say in this case, engineering talent. And they don't seem to find them in the US. So, employers make the applications. There's a lottery system every year. And once the lottery is taken out, whoever gets their name in, gets to go to the US.

Ha: About 85,000 new H-1B visas are issued every year – 65,000 of them bring in general talent from abroad. The remaining 20,000 are reserved for non-US citizens who received advanced degrees from American universities. Since 2011 – roughly 70 percent of the visas approved each year have gone to Indian-born citizens. Sankalp says, for a lot of educated, middle-class Indians, going to the US has been the ultimate dream – the American dream.

Phartiyal: You know, like everybody else from my generation, I sat for an engineering exam. Thankfully I did not get through, I would've made a terrible engineer. But there's a common saying in India that if you throw a rock up in the air, it'll probably hit an engineer. We have so many engineers and engineering colleges here, and engineering was and continues to be seen as a pathway to a better life, as a pathway to go to the US, as a means to get a green card or maybe settle in the US – essentially a better lifestyle and a good career.

Ha: It also meant they’d earn far more than they would staying in India.

Phartiyal: If you look at the conversion rate of dollar to the rupee, Indians would send money home and they would make their savings in rupees. So effectively they're paid much more. Someone with a master's degree and who's been in the US on an H-1B for about four years could make anywhere between $150,000 to $200,000 a year. The kind of money that someone with that experience in India would make, would be in millions of rupees, but not as much as somebody like that would make in the US.

Ha: But the program has come under criticism in recent years –

Phartiyal: Conservatives have criticized this program for taking away US jobs for cheap labor, including from India, undercutting US jobs.

Ha: In its statement announcing changes to the H-1B visa program, the White House said American workers were being replaced with lower-paid foreign labor and called it a national security threat. The Trump administration also claimed some entry-level H-1B visa holders make about a third less than full-time traditional workers. That wasn’t verified by Bloomberg, but a Bloomberg investigation published earlier this year did find that US banks and telecoms companies used the visa program to hire lower-paid workers. They were able to do this indirectly through staffing and outsourcing companies that have previously been able to capture about half of the new visas allocated each year.

By introducing a high barrier to hiring foreign workers, the hope is that companies would train and hire Americans instead. But Sankalp says it’s not clear whether that will happen:

Phartiyal: Not everybody is undercutting jobs. There may be few who are undercutting American skilled workers, but the whole idea revolves around the fact that America has a dearth of STEM talent – science, tech, engineering and math. And Indians or Chinese seem to be more skilled on those aspects. This is a very conservative approach to say that these people are taking away American jobs because when these people go to American companies, they're also creating more jobs. They're paying social security, they're paying taxes. So that's fueling the economy as well.

The way to look at this is that this is essentially putting brakes on a moving car that was doing well for the US. And if you don't bring H-1B workers to the US to work for companies, that means you're essentially raising the costs for American corporations as well, because these people go there specifically to work on the demand of American corporations. For Indian outsourcers, they send these people to client sites. They're important in maintaining client relationships, work for clients and sensitive projects.

Ha: What potentially could be the ripple effects for Indian IT firms like Infosys and Tata, some of the biggest who do use H-1Bs, and as well as the next tier of companies, right? The software services firms…

Phartiyal: Software services companies in India are already struggling with muted growth. They also have a new challenger in AI. So this is another kick on the backside, if I can call it that. In terms of how they will, uh, uh, weather the storm they are considering sending fewer people. At the same time employers could be willing to pay that $100,000 fee if they really want skilled talent from India to go to the US. But those are the ones that are really, really smart and those are the ones that employers are willing to pay for. So there'll be a certain reduction in the number of people that go to the US. Will H-1B alone upend the entire Indian IT industry? No, I don't believe it will.

Ha: As the US raises barriers for foreign workers, is the American dream out of reach for Indians? And can India, or other countries, capitalize on this opportunity to lure talent?

Ha: For tens of thousands of Indian workers, the dream of building a career in the United States may be slipping away. But Sankalp Phartiyal says, new opportunities are opening up elsewhere…

Could the policy also unintentionally in some ways benefit India by retaining more skilled workers here domestically instead of them going overseas?

Phartiyal: It's a theory, it's a, it's a, it's a good theory.

Ha: But not likely?

Phartiyal: It all depends on whether India seizes the moment to bring out policies that could help retain talent. Because one of the biggest reasons Indian talent went outside was more money, but also a stable policy, good working environment, the chance to work in a global company. If India is able to give its talent, good product and services, jobs, create a global work environment, maintain that healthy work-life balance, yes, we could retain some talent, but one could argue that good talent will always find its way to find the best job.

Ha: I wanna talk a little bit about the on the ground effect, you know, impact as well. The H-1B program has been a part of this mark of success for a lot of Indians being able to work in the US. What does this mean for, you know, those people and their kind of hopes and dreams?

Phartiyal: I've been speaking to some of the people who've gone to the US on H-1Bs. Even some students, there is a sense of extreme nervousness. I think the constant flip-flop on policy, which wasn't the case in the US earlier, is something that terrifies people and makes them extremely nervous. And so I think the whole idea that the US is a stable place to work for foreigners or immigrants, that idea is just shattered.

Ha: Some countries are already moving to capitalize on the chaos. After Trump announced the changes to the H-1B program, the UK said Britain will make it easier for companies to bring in top talent.

Phartiyal: Canada, UK, Australia and Eastern Europe are emerging as new tech and outsourcing hubs. And even though salaries there could be lower than in the Silicon Valley or the US in general, these new hubs will be able to draw Indian talent because of good working conditions and competitive pay packages.

Ha: Meanwhile Germany’s ambassador to India released a video message, encouraging skilled Indian professionals to consider Germany as their next destination.

Philipp Ackermann : Highly skilled Indians are welcome in Germany. Our migration policy works a bit like a German car. It's reliable, it's modern, it's predictable. It'll go in a straight line, with no zigzags…

Ha: And while this may look like a golden opportunity to attract foreign talent, Sankalp says one country could end up missing out – India itself. The country is grappling with rising youth unemployment and an under-employment crisis.

Phartiyal: We have reported instances of college workers sitting on the bench. They've been hired by companies, but they're not actively involved in projects or day-to-day work, even though they're hired on paper.

Ha: And what, why is that?

Phartiyal: If I talk specifically about IT companies, the business of IT companies depends on work given by clients. So if, because of the war in Europe or because of the war in the Middle East or sanctions on Russia, companies are pausing spends, then that directly translates to lesser work for Indian outsourcers, which means that the people they've hired from colleges have to sit back till the time they're called for work by the Indian companies. You could call it disguised unemployment. They're hired on paper, but they're not getting any salaries or they're not getting any work as yet. And also AI is a disruptor. AI will disrupt more and more work, which means that all of the college graduates in engineering may not immediately get jobs.

Ha: Another factor that could discourage skilled Indian professionals from staying in India: the work culture.

Phartiyal: A majority of businesses in India are family run. These are not professionally run businesses. Which essentially boils down to a very toxic workplace situation or a non-professional set-up and you don't have the semblance of a work-life balance. So the idea of working in a global corporation comes with its compensation benefits as well as good work-life balance, a global culture. And I think that's what's lacking in Indian companies.

Ha: Still, Sankalp says the ripple effects of the H-1B visa changes might help India retain some of its talent – at least for now. India has the third largest startup ecosystem in the world, trailing only the US and China.

Phartiyal: If American companies continue to push hard on these global capability centers, you could make the case that a lot of Indian talent who would otherwise go to the US on H-1Bs, could end up working in India with American corporations in their innovation, in their R&D centers. Right now everything is pretty volatile. The situation is still emerging, but in the long run, I think things should settle and it shouldn't be that bad.

Ha: There have been a series of blows to India from US policy. First there were moves to restrict student visas. Then India got hit with 50% tariffs, which is among the highest of countries. And now, of course, H-1Bs. For many years, India was seen as a partner for the US in Asia. Do Indians now feel like the relationship is taking this dramatic, downward turn?

Phartiyal: Yes, of course. I mean, it's quite visible to Indians that America, which had seen India as a friend over the decades, the sort of camaraderie that existed between President Trump and Prime Minister Modi, is definitely fading, because we've seen these punitive measures in India. And when I talk to sources in the tech industry, when I talk to political people, there's always a sense that the US has not been kind to India and has been extremely harsh and has not valued the strategic relationship that it wanted, that, that the two countries wanted. I think the government certainly is recalibrating its US policy. But Indians in general continue to see the US as a destination. Indian skilled talent continues to view US companies as a destination for their careers. So to the general public, US and its lure is still there.

Ha: Could this turn into a moment for India? For India to rise, to really find a way to change its culture, to make it more appealing for the most educated, the most talented to stay here in India and not go overseas for opportunity?

Phartiyal: I would certainly hope so, but I could have said that at any point in the last 20 years. It really depends on whether India's able to create the kind of global environment that its skilled professionals need, whether India's able to create that kind of physical as well as digital infrastructure, that global professionals need. Whether India is able to give global companies the ease of doing business that they find in China or in Vietnam, it really depends on how the government wants to seize this opportunity. Can we do better and turn India into a global workplace bigger than it already is? Yes, we can. Is there room for improvement? Yes. But you know, all of the world's biggest corporations are already here. And I think we are very much near to grabbing this moment and making it ours.