Panic, confusion and then a hasty White House climbdown - it was a weekend of whiplash for hundreds of thousands of Indians on H-1B visas.
On Friday, US President Donald Trump stunned the tech world by announcing an up to 50-fold hike in the cost of skilled worker permits - to $100,000. Chaos followed: Silicon Valley firms urged staff not to travel outside the country, overseas workers scrambled for flights, and immigration lawyers worked overtime to decode the order.
By Saturday, the White House sought to calm the storm, clarifying that the fee applied only to new applicants and was a one-off. Yet, the long-standing H-1B programme - criticised for undercutting American workers but praised for attracting global talent - still faces an uncertain future.
Even with the tweak, the policy effectively shutters the H-1B pipeline that, for three decades, powered the American dream for millions of Indians and, more importantly, supplied the lifeblood of talent to US industries.
That pipeline reshaped both countries. For India, the H-1B became a vehicle of aspiration: small-town coders turned dollar earners, families vaulted into the middle class, and entire industries - from airlines to real estate - catered to a new class of globe-trotting Indians.
For the US, it meant an infusion of talent that filled labs, classrooms, hospitals and start-ups. Today, Indian-origin executives run Google, Microsoft and IBM, and Indian doctors make up nearly 6% of the US physician workforce.
Indians dominate the H-1B programme, making up more than 70% of the recipients in recent years. (China was the second-largest source, making up about 12% of beneficiaries.)
In tech, their presence is even starker: a Freedom of Information Act request in 2015 showed over 80% of computer jobs went to Indian nationals - a share industry insiders say hasn't shifted much.
The medical sector underlines the stakes. In 2023, more than 8,200 H-1Bs were approved to work in general medicine and surgical hospitals.
India is the largest single source of international medical graduates (who are typically in US on H-1B visas) and make up about 22% of all international doctors. With international doctors forming up to a quarter of US physicians, Indian H-1B holders likely account for around 5-6% of the total.
Experts say pay data shows why Trump's new $100,000 fee is unworkable. In 2023, the median salary for new H-1B employees was $94,000, compared with $129,000 for those already in the system. Since the fee targets new hires, most won't even earn enough to cover it, say experts.
The demand for new workers in fields like tech and medicine [in US] is projected to increase (albeit in uneven ways), and given how specialised and critical these fields are, a shortage that lasts even a few years could have a serious impact on the US economy and national well-being.
That anxiety is echoed by other experts: “It will likely also incentivise more skilled Indian workers to look at other countries for international study and have a cascading effect on the American university system as well.”
Indians still account for 70% of H-1B recipients, but only three of the top 10 H-1B employers had ties to India in 2023, down from six in 2016, according to Pew Research.
For now, the full impact of the tax hike remains uncertain. Immigration lawyers expect Trump's move to face legal challenges soon. Experts warn that the fallout could be uneven, with possible exemptions for major tech companies that could undermine the fee's intent.
As the dust settles, the H-1B shake-up looks less like a tax on foreign workers and more like a stress test for US companies - and the economy. H-1B visa holders and their families contribute roughly $86bn annually to the US economy, including $24bn in federal payroll taxes.
How companies respond will determine whether the US continues to lead in innovation and talent - or cedes ground to more welcoming economies.
