H-1B shift shows Trump moving from ideology to pragmatism, analysts say

In an interview with Fox News recently, US President Trump said that the country needed skilled workers, which is a departure from his earlier stance.

With US President Donald Trump announcing new curbs and higher fees on H-1B visas, his sudden softening on the outsourcing of talent has barely registered in India.

Industry experts say the country’s top IT services firms have long adapted to shifting US immigration rules, significantly reducing their dependence on H-1B visas.

Roughly 75 percent of all H-1B visas issued each year go to Indian applicants, making it a crucial non-immigrant visa category for US companies that hire and deploy Indian tech talent.

Analysts describe Trump’s latest stance as a case of “imagination meeting practicality.” They argue the shift will have limited impact: Indian IT companies already hire 70-80 percent of their US workforce locally, while American tech giants and multinational firms see building Global Capability Centers (GCCs) in India as a long-term strategic move - not merely a way to cut visa costs.

Prashant Yadav, partner for digital and technology at Amrop India, concurred with Trump’s comments, saying that it was never about replacing local people with outsourced talent, the US lacks certain complex skill sets locally, for which they hire from other countries.

“IT companies have drastically increased their local hiring. They are relying more on subcontractors and local hiring, reducing H1B requirements. None of the top 10 IT services will face margin or growth challenges if H-1B reduces any further,” said Gaurav Vasu, founder and CEO at market intelligence firm UnearthInsight.

He added that almost 70 per cent of the US talent hired by IT firms are local or green card holders, with 8-15 per cent being subcontractors, making landed resources or H-1B holders go down to 15-25 per cent or even less than that.

Also, read: After visa fee hike, Trump's wage-based H-1B plan threatens to push Indian IT further offshore

Reality check

For the last 60-80 years, the US has thrived on getting talent from outside, said Ashutosh Sharma, VP, Research Director at Forrester.

“This is a scenario of when imagination meets practicality. You run into the hard wall of practicality. And Trump's right about the fact that the US just doesn't have those skills,” Sharma said.

Moreover, even American MNCs and technology giants aren’t relying on H-1Bs to hire Indian talent. According to Vasu, since 2023, more than 170- 180 GCCs were set up in India, and nearly 70 plus in 2025 so far, with none of them calling out H-1B as a driver for that.

The GCCs are a long-term strategic bet for MNCs, driven by the need for building an AI-led tech stack, cost arbitrage, and driving innovation.

“The work that has to be necessarily done onshore is the work that requires extensive collaboration and the work that is very critical from an IP standpoint. Also, the ability of product companies like Google, Meta, Microsoft, and Oracle to pay is much higher. The compensation they pay is much higher,” said Amrop’s Yadav.

Also, read: Trump’s proposed H-1B wage-based selection rule could squeeze Indian IT’s early-career hires

What did Trump say?

In an interview with Fox News’ Laura Ingraham aired on Tuesday (November 11), Trump said that the country needed skilled workers, even as his administration has tightened visa rules that make it harder for organisations seeking such workers.

When asked whether H-1B visas would remain a priority, with Ingraham argued that the program could conflict with his push to raise domestic wages. “You also do have to bring in talent,” Trump said.

“You don’t have certain talents. And you have to, people have to learn. You can’t take people off, like an unemployment line, and say, ‘I’m going to put you into a factory. We’re going to make missiles,’” he said.

His remarks acknowledging the need for some skilled foreign workers come months after his administration imposed a $100,000 application fee on the H-1B visa -- a program heavily relied upon by major US firms, particularly in the tech sector, to hire overseas

Also, read: H-1B fee hike unlikely to impact Indian IT as top firms reduce dependency