"Like other Trump schemes, this H-1B caper will backfire," wrote billionaire Silicon Valley investor Michael Moritz in the Financial Times. He argued that the new $100K fee for H1B visas shows a poor understanding of what makes US tech successful. Moritz warned that the high fee will simply push companies to move work to other global cities like Istanbul, Poland, or Bengaluru.

A single, dramatic policy change has challenged the long-held idea that the best talent must go to the US. For years, the H-1B visa has been the golden ticket for foreign workers, especially those from India, and kept the US tech industry at the forefront. Top US CEOs (including Trump supporter Elon Musk) first arrived in the US on the H1B visa and built some of the biggest tech companies in the world. Nearly one in five computer programmers and one in four scientists in the US are foreign-born. This pipeline of talent, crucial to the American economy, is now at serious risk.

But the H1B program has also been controversial. Companies claim they need it to hire people with specialised skills, but critics argue that it’s often used to bring in cheaper, mid-level workers earning modest salaries. Trump’s new executive order imposes a $100,000 fee on each H-1B worker, with the policy taking full effect in February 2026. For most firms, that price is impossible – only the richest tech giants could afford to bring in foreign talent at such high prices.

The proposal has split Silicon Valley. NVIDIA CEO Jensen Huang criticized it, saying, "We want all the brightest minds to come to the US – remember immigration is the foundation of the American Dream." In contrast, Netflix Co-founder Reed Hastings surprisingly supported the fee, calling it a "great solution" that makes sure the H-1B is "used just for very high value jobs" and gets rid of the uncertain lottery system. Interestingly, Netflix has only about 112 H-1B employees, indicating a lower dependence on the program.

In this edition of Chart of the Week, we will look at the possible fallout from the new $100,000 H-1B visa fee: how it prices out most talent, forces companies to offshore high-value jobs to India, and threatens to trigger a "reverse brain drain" away from the US.

New visa costs put most H-1B jobs out of reach

The new $100K H-1B fee makes the visa impractical for most jobs. Economists say a company would need to pay a salary of about $225,000 over three years to justify the expense. Yet, only about 5% of all H-1B job postings meet that salary level, meaning most applicants simply won’t qualify for the visa.

The impact is sharpest on big employers. Amazon, one of the largest users of H-1B visas, had just 4% of its 21,600 recent job postings above the $225,000 mark. IT staffing firms are hit even harder. TCS, India’s largest IT company, had no H-1B applications above the break-even point, with an average salary of $89,461. This shows how much they have relied on the mid-level roles that are now unaffordable.

Before this change, the typical H-1B cost about $10,000. The 10X jump, combined with the uncertainty of the lottery, is expected to cause applications to plummet. Experts believe companies will turn to offshoring or automation instead—signalling that the US is no longer the top destination for much of the world’s skilled talent.

Adapt and offshore: How Indian IT is navigating the fee hike

The new H-1B fee affects Indian IT companies in different ways. Many have already adapted to past US visa shocks, cutting H-1B filings by more than 50% in recent years to build a locally integrated workforce. 

Indian companies have increased local hiring in the US—which now makes up over half of their US workforce—and shifted more work offshore. Together, they have invested over $1 billion in hiring and training staff in the US.

Still, the fee hike will hurt. The industry's traditional business model relied on a small team of skilled workers in the US to manage massive projects run by teams in India. The H-1B visa was the route for these on-site workers. Although these visa holders comprise a small fraction of the total workforce (around 3-5%), they are needed for winning and managing projects that generate substantial revenue.

The financial pain won't be immediate, but it is coming. Since the new fee applies only to fresh applications and not renewals, the real burden will be felt from 2027 onward. Analysts expect the hit to be modest for larger firms—about 0.3–1% on earnings per share. Shweta Rajani, head of mutual funds at Anand Rathi Wealth, noted, “Mid-cap IT stocks like Birlasoft and Persistent may see larger effects, but most large-cap companies can offset some costs through offshoring, local hires, or sharing costs with clients.”

Reverse brain drain: Skilled work moves to India

The proposed $100,000 H-1B visa fee could accelerate the relocation of high-value jobs to India. Faced with such a high cost of bringing top talent from their Indian offices to the US, major tech companies and global banks are realising it's much cheaper to expand their operations and hire directly in India. For them, it's a straightforward business decision.

This trend is already in motion. Citigroup, for example, recently moved nearly 1,000 tech jobs to its business centres in India, where it already has about 33,000 employees. Similarly, JPMorgan Chase has over 55,000 employees in India, and Goldman Sachs is also expected to rely more heavily on its Indian operations.

Ironically, a policy meant to protect American jobs may push even more skilled work out of the US. Analysts warn this could discourage global talent from coming to America, weaken its edge in innovation, and fuel a “reverse brain drain” that strengthens India’s tech ecosystem.

As former Tech Mahindra CEO CP Gurnani put it: “This (H1-B fee hike) hurts the US more than it hurts Indian companies, which have reduced their H-1B dependence by 60% in the last five years. In contrast, the dependence on H-1Bs has been going up for American counterparts. He also noted that they will do more offshoring, expand global capability centres (GCCs), and increase automation.

US big tech will also feel the pain. In FY24 ending September, Amazon, Microsoft, Meta, and Apple together received more approvals than the top seven Indian IT firms combined. That makes them especially vulnerable to the new fee, forcing them to lean more on their Indian GCCs, which are increasingly handling advanced R&D and product development.

Commenting on how financial giants are reacting, Abizer Diwanji of NeoStart Advisors noted that banks would be "calibrating a new strategy for the global capability centres." He added, “It appears there will be onshoring of jobs to India, adding new functions. However, none will rush decisions while the situation evolves. They will wait for more clarity.”