H1B visa fee hike won’t immediately hurt Indian IT sector, says CEA

H1B visa fee hike won’t immediately hurt Indian IT sector, says CEA

The US’ decision to raise the fee for new H-1B visas will not have an immediate impact on India’s services exports or remittances, as the bulk of issuances are renewals, which remain unaffected, chief economic adviser (CEA) V Anantha Nageswaran said on September 22.

The remarks came after US President Donald Trump over the weekend signed a proclamation raising to $100,000 the application fee on visas used by companies to hire foreign workers, including from India. India is one of the biggest beneficiaries of the work visa programme.

“Two-thirds of the annual visa issuances is pertaining to renewals and that is not affected by this new announcement. The fee also is a one-time thing; it kicks in from 2026. In that sense, the impact will not be immediate,” CEA said at the Network18’s Reforms Reloaded event.

By the time the next lottery comes around, there is plenty of room for the American companies and the Indian companies to figure out ways to deal with this, he said. “It is difficult to give a quantified impact of what it would mean for remittances or for services sector export growth. I would not be anxious at this point about the impact,” he said.In the immediate aftermath of the announcement, the move triggered a rush among companies and anxious H1B visa holders, particularly those travelling outside the US, leading to confusion and scenes of chaos at some airports over fears of the September 21 deadline.

Subsequently, the US government clarified that the fee hike would only apply to new H1B applicants and would not affect existing visa holders or renewals, which account for the majority of annual issuances.

The H1B visa programme for India’s information technology sector with Indian professionals constitutes a large share of beneficiaries. While the higher fee could raise costs for companies in the long term, the delayed implementation until 2026 provides a window for businesses to adjust.

How the H1B lottery works

Each year, the US Citizenship and Immigration Services (USCIS) makes available new H1B visas under the regular cap. Since applications far exceed this limit, USCIS conducts a computer-generated random selection process, commonly referred to as the H1B lottery, to decide which applicants are allowed to proceed.

This lottery applies only to new H1B petitions under the annual cap, not to extensions or renewals.