$100,000 H-1B visa fee alarms Indian IT sector, immigration lawyers expected to mount legal challenge to Trump's Executive Order

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India’s $280-billion technology services sector was thrown into disarray on Saturday after a surprise executive order by US President Donald Trump imposed a $100,000 annual fee on new H-1B visa applications, effective with just one day’s notice.

While the sector is assessing the possible disruption, immigration lawyers and industry stakeholders are set to challenge the executive order over the weekend.

Once this new proclamation comes into effect from September 21, 12:01 AM eastern time, any professional despite having a valid H-1B visa may also have to pay $100,000 fee to enter the US, in case they are away from the country at the moment.

H-1B visas are non-immigrant visas that allow US companies to employ foreign workers in speciality occupations such as science, technology, engineering, mathematics (STEM), and IT.

Every year, nearly 70-75 percent of the H-1B visas allocated from a cap of 85,000, goes to Indian professionals due to the sheer volume of applications.

What’s going to happen next?

The executive order although passed, leaves several unanswered queries and uncertainties.

According to Florida-based immigration lawyer and managing partner of LawQuest, Poorvi Chothani, the U.S. Citizenship and Immigration Services (USCIS) has been asked not to adjudicate petitions for H-1B beneficiaries who are outside the US, unless they are accompanied by proof of payment of $100,000 fee.

“But at this point, we don't know where to pay the fee, how to pay the fee, when to pay the fee, or who pays the fee. We have no details about that,” she tells.

Chothani advised the impacted professionals to “wait and watch”, because the next step is going to be a litigation against Trump’s move.

“There's already an organisation called Impact Immigration that files cases on immigration issues at large. They're already collecting plaintiffs and they're planning to file a suit, at least requesting a temporary restraining order (TRO) which in India we would call a temporary injunction,” she said.

She added, “This is led by Greg Siskind and Charles Cook -- two prominent lawyers in the litigation and immigration space in America. They are hoping to file either tomorrow or early Monday morning. By Monday, 5 p.m. Eastern Time, we will have something that will show that this thing has been stopped, at least for now.”

“From a legal standpoint, this policy is on shaky ground,” explained Phil Fersht, Founder and CEO, HFS Research, because the fee-setting authority sits with USCIS through a cost-based rulemaking process, not unilateral executive orders.

“I fully expect lawsuits and an injunction before the September 21 effective date. Without congressional support, durability is low,” he told Moneycontrol.

What challenges will Indian IT face?

Former Tech Mahindra chief executive and founder of AIonOS, CP Gurnani believes that the ultimate impact on the business of Indian IT players will be minimal as over the past several years, the sector has significantly reduced their reliance on the H-1B visa, with filings dropping by over 50%.

Moneycontrol had reported that Indian IT firms have strategically reduced their dependency on H-1B visas, by increasing local hiring in the US.

Between FY15 to FY23, approved H-1B petitions for initial employment from the top seven Indian IT firms fell 56 percent. It plunged from 15,100 in FY15 to 6,700 in FY23, according to data from the National Foundation for American Policy (NFAP).

“This shift is a result of our ongoing strategy to hire more locally, invest in automation and enhance our global delivery models. While visa fees may change, the impact on our business will be minimal, as we’ve already adapted to this evolving landscape," Gurnani said.

Even so, Fersht said, the psychological impact is already real. Enterprises and providers are scenario-planning, repricing deals, and accelerating local hiring where possible.

“The bigger story is the long-term shift: this policy, even if struck down, pushes the industry faster toward automation, platformized services, and a reduced reliance on H-1Bs,” he said.

Ashutosh Sharma, VP, Research Director at Forrester sees this as a shift that will ultimately lead to more offshoring instead, as US-based clients of IT companies will continue to be interested in valuable cost propositions, which means the firms will end up hiring more in India itself instead of trying to deploy workforce in US.

“Additionally, Indian IT companies would also look at other options to service US clients, either through hiring local talent or from near shore locations such as Canada and Mexico as well,” he added.

What about Big Tech firms hiring Indians?

Interestingly, while Indian IT companies have reduced H-1B dependency, the larger US technology giants have continued to corner more allocations to hire Indian talent.

The top five American firms together secured nearly 28,000 H-1B visa approvals in FY2024, Moneycontrol reported. And in FY2025, a leading e-commerce company again topped the list with about 10,000 approvals.

Industry analysts emphasised that these H-1B visa fee changes still won’t have much of an impact on the big tech firms.

According to Gaurav Vasu, founder and CEO, UnearthInsight, companies like Amazon, Microsoft, Meta, Tesla hire technology experts from foreign lands at much higher salaries (much beyond $60,000 levels).

“American big tech majors, who are major users of H1-Bs today, hire high-skilled foreign workers in the larger salary brackets and this additional fee will not impact their financials to a great extent,” he said.

If imposed, the H-1B visa fee would discourage mass applications for lower tech salaries from foreign countries.

“Large US tech companies are less affected as they often rely on L-1 visas, so the burden is squarely on Indian heritage IT firms and their clients,” said Fersht.

Also read: Trump’s H-1B blunder and India’s golden opportunity