Indian SaaS and AI startups are recalibrating their US expansion and hiring strategies after Washington’s proposal to impose a steep $100,000 annual fee on H-1B visas.
The move, if implemented, could dramatically raise the cost of relocating skilled engineers and managers to America, the single largest market for most software startups, and reshape global talent flows in the process.
“The fee makes the traditional MBA or master’s route in the US much harder to justify,” said Shantanu Gangal, co-founder and CEO of Prodigal, a Silicon Valley-based AI startup. "For many students, the return on investment won’t add up."
Arvind Parthiban, co-founder and CEO of SuperOps, said the economics no longer stack up. "Hiring NRIs in the US will become tougher. We have to rethink and hire talent where it makes sense, not necessarily in the US.”
The H-1B visa has long been the backbone of skilled migration to the US. It allows American companies to hire foreign professionals in specialised fields such as engineering, medicine, and computer science, with Indian workers receiving nearly 70% of the visas issued each year.
For decades, the program has underpinned Silicon Valley’s dominance by attracting some of the world’s brightest minds.
Reverse brain-drain
Rituparna Chakraborty, Partner India at executive search firm TrueSearch, believes the policy could accelerate a reverse brain drain.
"What looks like the end of the road for Indian H-1B holders could actually mark the beginning of a tech renaissance in India," she said.
This comes at a time when several founders and top executives of the SaaS firms in India were relocating to the US to be closer to AI developments.
Also Read: The great migration: Indian SaaS founders relocate to US to capitalise on AI boom
"For SaaS firms, so long as the founder and a couple of key folks can come on O1 or L1 and build a local team, they’ll be fine. The H1-B system was never really built for them...The American dream for outside folks, just migrating, that is decidedly over, whether SaaS or not," said an AI startup founder requesting anonymity.
But founders warn that the new levy could act as a “wall” against global talent.
“Engineers in AI are judged by what they can build, not where they studied,” Gangal added. “AI is flattening borders even as immigration policies tighten them. My advice to young talent: don’t wait for a visa, start building now, and the market will find you.”
Rethinking business models
For SaaS startups, which rely heavily on U.S. revenues and customer acquisition, the visa shock is already forcing a rethink of business models.
Some founders are framing the policy as an opportunity to diversify their teams.
“We’ve been hiring local talent in the US for GTM roles for some time,” said Gaurav Sharma, founder and CEO of SaaS Labs. “For sending people, we still have options like L1 and B1/B2 visas. This ruling will likely be challenged.”
Sharma said the long-term shift could actually work in startups’ favour. “In the short term, we’ll hire more locally in the US. But we’ll also explore hubs like Mexico, Canada, and Dublin. This will push SaaS and AI companies to do more with less and adopt AI faster.”
His company, which already has a base in Poland, plans to double down on Eastern Europe while continuing to build US sales teams. Other founders are scouting Latin America, Vietnam, and the Philippines for cost-effective hiring across sales, support, and engineering.
Sanjay Tripathy, co-founder and CEO of cross-border payments software platform Briskpe said “The $100,000 H-1B fee is nothing short of a wall against talent".
“The US risks stalling its own innovation engine. India, meanwhile, is ready to absorb this talent. Cities like Bengaluru, Hyderabad, and Pune will gain from this shift. What America loses, India stands to gain.”
Industry watchers believe that while big tech firms dependent on H-1Bs may lobby to dilute the proposal, SaaS and AI startups are likely to adapt more quickly. Many are already remote-first, and the rising cost of U.S. visas may accelerate that model.
TrueSearch's Chakraborty added that Startups now have access to world-class talent returning home with global exposure.
“Startups now have access to world-class talent returning home with global exposure, especially from Silicon Valley. Companies built on distributed models can seamlessly integrate this pool, and India’s $250 billion IT industry stands to gain new muscle enriched by global best practices. This moment, though unsettling for individuals, could ignite a revolution in India’s SaaS and AI landscape.”
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