Proposed ₹98 lakh fee on H-1B visa applications threatens to hurt Indians, narrow America's pipeline of skilled foreign workers

The US Department of Homeland Security has unveiled a rule that would attach a fee of $1,03,265 (₹98.60 lakh) to every cap-subject H-1B visa petition, on top of existing filing costs and with no assurance of clearing the annual lottery. The department expects the levy to raise roughly $8.8 billion a year, spread across agencies from USCIS to Immigration and Customs Enforcement. Universities, hospitals and non-profit research bodies would be spared. Everyone else sponsoring a foreign worker would have to pay the fees.

The move follows the collapse of an earlier attempt. In September 2025, the Trump administration used a presidential proclamation to impose a $1,00,000 entry fee on H-1B holders. A federal judge in Massachusetts struck it down in June this year, ruling it an unauthorised tax that only Congress could levy. This time DHS has chosen formal rulemaking instead of executive fiat, framing the charge as cost recovery rather than restriction. The scope has also widened. Where the 2025 fee applied only to workers hired from abroad, the new rule reaches change-of-status applications from foreign nationals already inside the country, including graduates on Optional Practical Training. DHS has further warned that should the original fee survive on appeal, employers could face upwards of US$2,00,000 per worker before ordinary sponsorship costs are even added.

The burden will fall overwhelmingly on Indian and Chinese professionals, who between them account for the vast bulk of H-1B approvals. Indian nationals alone make up 70 per cent of petitions each year, close to 2,84,000 of them, while Chinese nationals account for roughly 12 per cent. For the thousands of Indian engineers, analysts and researchers who treat the H-1B as the natural next step after an American degree, a six-figure, non-refundable payment with no guarantee of selection changes the arithmetic entirely. Employers, already wary of lottery odds, are unlikely to absorb such a cost for entry-level hires, and start-ups with thin margins may abandon foreign sponsorship altogether. The "education-to-workforce pipeline" that has carried generations of Indian graduates from campus to corporate America looks considerably narrower now.

China stands to gain from the disruption. As American sponsorship grows costlier and less certain, Chinese government and technology firms have stepped up efforts to draw talent home, offering equity, housing and tax incentives in fields such as artificial intelligence and semiconductors.

Opinion in the United States is sharply divided. The Chamber of Commerce has warned that the fee is unaffordable for start-ups and mid-sized firms that depend on H-1B talent to grow, and economists broadly agree that H-1B workers add to American productivity. Technology companies, including Google, Amazon and Meta, have criticised the rule as protectionism dressed up as reform, and some legal scholars question whether visa fees can lawfully fund enforcement work at agencies such as ICE that have little to do with visa processing itself.

The administration sees it differently. Vice President J.D. Vance has argued that companies needing workers should hire and train Americans instead, a line that captures the MAGA case against the programme as a mechanism for undercutting domestic wages and displacing local graduates. Supporters also point to the billions the fee would raise for modernising an overstretched immigration system, clearing adjudication backlogs and enforcing labour compliance, all without drawing on taxpayers.

The H-1B programme faces pressure from several directions at once. Senators Chuck Grassley and Dick Durbin have revived a bipartisan reform bill that would tighten the definition of specialty occupations, mandate job postings on a Department of Labour website and favour advanced STEM degree holders over other applicants. DHS is separately weighing a $1,00,000 charge on international graduates using OPT, along with a switch to salary-weighted selection that would favour higher earners over the current random lottery. New biometric and security fees of up to $4,500 already apply to extensions and corporate transfers, and the administration has proposed scrapping the grace period once offered to laid-off H-1B workers, a change that would leave those who lose their jobs with far less time to find new sponsors or leave the country.

These measures point towards a system designed to admit fewer foreign workers and to make those who do enter costlier and more precarious. For India, which supplies the largest share of H-1B beneficiaries, the effect is likely to be felt in a steady narrowing of options: fewer sponsorships offered, fewer graduates retained, and a growing incentive for talent to look elsewhere.