President Donald Trump’s September 19 executive proclamation imposing a $1,00,000 annual fee on H-1B visa applications represents more than an immigration policy shift — it marks the effective abandonment of a strategic partnership that has defined India-US relations for over two decades. With Indians comprising approximately 70 per cent of H-1B visa recipients in 2024, this policy deliberately targets one of America’s most successful immigrant communities while undermining the foundation of bilateral cooperation that both nations have painstakingly built since the nuclear deal of 2005.
The India-US strategic partnership, formally launched during President George W Bush’s administration and strengthened under successive governments, was predicated on shared democratic values, complementary economic strengths and mutual respect for each nation’s contributions to global prosperity. The centrepiece of this relationship was the recognition that India’s human capital could drive American innovation while American markets and technology could accelerate India’s development. This symbiotic vision now lies in tatters.
For two decades, American leaders from both parties celebrated the Indian-American success story. They praised the entrepreneurial spirit that saw Indians founding nearly half of America’s unicorn startups, the intellectual prowess that made Indians the backbone of Silicon Valley’s innovation engine and the democratic values that made India America’s natural partner in Asia. Today, that same success story has become the target of punitive policies designed to exclude rather than embrace Indian talent.
The abruptness of this policy shift — announced with just one day’s notice — reveals a callous disregard for the lives disrupted and the relationships damaged. NASSCOM’s warning that “a one-day deadline creates considerable uncertainty for businesses, professionals and students across the world” barely captures the human cost of this betrayal. Thousands of Indian families already established in the US or in the visa pipeline face immediate uncertainty, their American dreams shattered by a policy that treats them as economic threats rather than valued contributors.
The economic rationale for this policy exposes a fundamental hypocrisy in the US’s approach to global competition. While American leaders have long celebrated their nation’s ability to attract the world’s best and brightest, they now blame that same global talent for domestic economic challenges. The policy cites unemployment among recent computer science graduates at 6.1 per cent and computer engineering graduates at 7.5 per cent, yet conveniently ignores that these professionals often lack the specialised skills and experience that H-1B workers bring to American companies.
The White House justification that one software company was approved for over 5,000 H-1B workers while announcing layoffs of more than 15,000 employees reveals a troubling misunderstanding of modern business dynamics. Companies expand and contract based on market conditions, technological shifts and strategic pivots — not immigration policies. Blaming immigrant professionals for American corporate restructuring represents a dangerous slide toward economic nationalism that undermines the US’s own competitive advantages.
More fundamentally, this policy attacks the very model of complementary growth that has defined successful India-US economic cooperation. Indian professionals have not displaced American workers; they have enabled American companies to compete globally, scale rapidly and maintain technological leadership. The $285 billion Indian IT services sector has been America’s partner in digital transformation, not its competitor in job markets.
Perhaps most damaging is how this policy undermines the US’s credibility as a reliable strategic partner. For two decades, American officials have courted India with promises of deepened cooperation, strategic alignment and mutual prosperity. They have praised India’s democratic resilience, celebrated its economic growth and positioned the relationship as a cornerstone of the “Free and Open Indo-Pacific” strategy. These assurances now ring hollow in the face of the latest policies.
The timing is particularly revealing. As America seeks India’s support in containing China’s rise, balancing Russia’s influence, and maintaining stability in South Asia, it simultaneously undermines the human connections that have made this partnership possible. The Indian-American community has served as a bridge between the two nations, advocating for closer ties while demonstrating through their success that America benefits from embracing global talent. This policy effectively tells that community — and India — that their contributions are no longer valued.
The diplomatic implications extend far beyond immigration. This policy signals that America views relationships with developing nations as transactional rather than strategic, valuable only when serving immediate American interests. If the US can so casually abandon commitments to its most successful immigrant community, what assurances can other nations have about American reliability in security partnerships, trade agreements or multilateral initiatives?
From a geopolitical perspective, this policy represents a strategic gift to the US’s competitors. China has long struggled to attract global talent due to political restrictions and cultural barriers. America’s retreat from talent leadership removes one of its key advantages in the technology competition while potentially redirecting that talent toward China or other competitors.
The European Union, United Kingdom, Canada and Australia are already positioning themselves as alternatives to American opportunities. These nations recognise that in an increasingly knowledge-driven global economy, attracting top talent provides decisive competitive advantages. By abandoning this competition, the US essentially concedes technological leadership to nations more welcoming of global talent.
For India, this policy creates an unexpected opportunity to redirect talent and capital toward domestic development while building stronger partnerships with nations that value Indian contributions. The forced repatriation of skilled professionals could accelerate India’s own technological development while reducing its dependence on American markets and policies. In trying to weaken India’s economic connection to the US, this policy may ultimately strengthen India’s independent capabilities.
The bitter irony is that this policy addresses none of the legitimate concerns about China’s technological rise while potentially strengthening China’s position. The real challenge to American technological leadership comes not from Indian professionals seeking better opportunities, but from China’s state-directed technology development, intellectual property practices and strategic economic planning.
Indian H-1B professionals have been the US’s allies in maintaining technological superiority over China. They have contributed to American companies’ innovation capabilities, helped American startups compete globally and brought diverse perspectives that enhance creative problem-solving. By targeting these professionals, the US weakens its own position relative to China while creating resentment among natural allies.
The policy also misunderstands the nature of modern technological competition. Success in artificial intelligence, quantum computing, biotechnology and other critical fields depends not on restricting foreign talent but on creating environments where the world’s best minds want to work. China’s technological progress has occurred despite talent restrictions, not because of them. America’s advantage has always been its ability to attract and integrate global talent — an advantage this policy thoughtlessly discards.
Despite this setback, the fundamental logic of India-US strategic partnership remains sound. Both nations face similar challenges such as climate change and technological disruption. Both benefit from democratic governance, innovative private sectors and young populations. The question is whether America can recognize that its own interests are served by embracing rather than excluding Indian talent.
For India, this moment requires strategic patience combined with accelerated self-reliance. Rather than abandoning the partnership entirely, India should use this period to build independent capabilities while maintaining openness to renewed cooperation when American policies inevitably shift. The forced repatriation of talent and capital can strengthen India’s domestic innovation ecosystem while reducing vulnerability to future policy changes.
Targeting mobility of high-skilled professionals
The visa fee hike will impact operations of both American and Indian businesses — Indian IT majors like Infosys, TCS, HCL and Wipro have the most H-1B staff on their payrolls, as do US tech giants like Amazon, Microsoft, Meta, Apple and Google. The move will disrupt onshore projects of Indian tech companies. The Indian IT sector, already confronted with an uncertain global environment and grappling with the fallout of increasing adoption of AI, has its task cut out. A reduced flow of migrants could also have implications for remittances to India — the US accounted for 27.7 per cent of all remittances to the country in 2023-24.
But there could be some silver linings. The visa restrictions could provide an impetus to India’s Global Capacity Centres. Britta Glennon of the Wharton School of Business has shown that restrictions on H-1B immigration result in increased foreign employment, with firms opening more offices and hiring more people. Such an expansion tends to be concentrated in Canada, India and China. Indian policymakers and the industry have no time to lose. While India and other countries can do little to influence the ideological foundations of the American discourse on immigration, the question is what can be done domestically. Can the innovation hubs that power the US economy be replicated in India? Trump may, hopefully, soften his stance. The market, hopefully, will push him to do so. But hope, when it comes to Trump, is no strategy. India’s IT sector leaders have formidable talent, they need to look beyond their cost-plus, labour arbitrage model, get better at creating talent and nurturing an enabling ecosystem.
The Trump administration may well believe that IT firms have “manipulated the H-1B system”. But the move will have wide-ranging consequences for the US economy as well. Ensuring cost-effective labour replacement will be difficult for US companies. The demand-supply mismatch will put pressure on firm margins. More critically, skilled migrant workers form the core of the US knowledge and innovation ecosystem. As University of California economist Giovanni Peri has pointed out, 26 per cent of US-based Nobel Prize winners from 1990 to 2000 were immigrants. Stuart Anderson of the National Foundation for American Policy and Michaela Platzer of Content First, LLC, have also shown that between 1990-2005, 25 per cent of founders of public venture-backed US companies were immigrants. As companies are now unlikely to fork out $100,000 for each visa, talent may simply move to other, more welcoming parts of the world.
The tragedy of this H-1B policy is not just its immediate impact on Indian professionals and American companies, but its broader message about America’s retreat from global leadership. A nation that turns inward, blames foreign talent for domestic challenges and abandons successful partnerships will inevitably lose its position as a global innovation hub. The strategic partnership between India and the US was built on the recognition that both nations benefit from openness, cooperation, and shared prosperity. The latest policies of US represents the antithesis of these values.
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