US moves to scrap H-1B lottery system: Why Indian workers and Big Tech should worry | Explained

For decades, the United States has relied on two crucial visa programmes to attract foreign talent: the H-1B, which allows skilled professionals to work in America, and the L-1, which enables multinational companies to transfer employees across borders. These visas have powered Silicon Valley, filled critical skills gaps, and created opportunities for thousands of Indian professionals who now form the largest share of beneficiaries. But both programmes are facing their toughest challenge in years, as lawmakers in Washington push sweeping reforms and the Trump administration piles on unprecedented costs.

At the heart of this storm is the criticism that the system has been abused. Lawmakers argue that H-1B and L-1 schemes, meant to fill shortages, are being used to replace Americans with cheaper foreign labour. Senators Chuck Grassley and Dick Durbin have revived their H-1B and L-1 Visa Reform Act, demanding stricter eligibility rules, higher wages for visa holders, and mandatory public job postings. They insist that companies must first show genuine efforts to hire Americans before turning abroad. For Indian outsourcing firms that rely heavily on L-1 transfers, the message is clear: more scrutiny lies ahead.

If Congress is tightening the rules, the Trump administration is hitting harder. A $100,000 annual application fee for H-1B visas has been announced, up from just $215. The administration says it wants to discourage misuse, but critics warn this will price out smaller employers and tilt the system toward the richest corporations. Plans to replace the lottery with a salary-based allocation would also shift opportunities away from entry-level applicants -- many of them young Indian graduates -- towards high-paying roles. Meanwhile, the Department of Labour’s “Operation Firewall” has launched a crackdown on fraudulent applications.

Amazon, Microsoft, Google, Meta, Infosys, and TCS are now under direct questioning from senators over how they use H-1B visas while conducting large-scale layoffs. Amazon alone received approval for over 12,000 H-1Bs in early 2025, even as it cut US jobs. Lawmakers are also pushing to end the OPT programme that allows foreign students to work after graduation, raising the minimum H-1B salary to $110,000, and even restricting universities from hiring international professors.

The bill lays out several key changes:

Higher salary thresholds: Raising the minimum wage for H-1B workers to ensure they are not underpaid compared to Americans.

Stricter eligibility rules: Prioritising visas for highly skilled jobs and reducing approvals for entry-level roles.

Mandatory job postings: Employers must post available jobs publicly before applying for an H-1B, proving they tried to hire locally first.

Greater oversight of outsourcing firms: L-1 visas used by Indian IT service providers will face more audits and transparency requirements.

Ending OPT benefits: The Optional Practical Training programme for international students could be scaled back, limiting their ability to work in the US after graduation.

Restrictions on universities: Some lawmakers have even proposed limiting universities from filling teaching posts with foreign professors.

The stakes are enormous for India, whose nationals received over 70 per cent of H-1Bs in 2024. Indian engineers, data scientists, and IT professionals form the backbone of the programme. Any restrictions, fee hikes, or salary-based allocations will disproportionately affect them. For thousands of families, the H-1B has been not just a work permit but a pathway to US citizenship. With reforms gathering momentum in Washington, that pathway is becoming increasingly uncertain.