By Dave Makkar

As the global race for AI, biotech, and digital supremacy intensifies, America’s latest immigration shockwave may prove to be a strategic misstep. On September 21, 2025, President Donald Trump signed a proclamation imposing a one-time $100,000 surcharge on new H-1B visa petitions. Framed as a wage correction targeting outsourcing firms, the move has already disrupted talent pipelines, rattled tech boardrooms, and strained U.S.-India relations.

The executive order, titled “Restriction on Entry of Certain Nonimmigrant Workers”, applies immediately and remains valid for 12 months unless extended. It arrives alongside a shift to a wage-weighted lottery system, favoring elite firms and sidelining startups, universities, and hospitals that rely on mid-tier talent. Legal experts warn the policy may not survive judicial scrutiny, with immigration scholars arguing that the fee lacks statutory backing and violates the Administrative Procedure Act. But even if overturned, the damage is done. The H-1B ecosystem—once a symbol of U.S. openness and innovation—is now a battleground of wage politics, nationalism, and strategic recalibration.

In his televised remarks, President Trump declared: “For too long, foreign outsourcing companies have gamed the H-1B system—bringing in cheap labor, depressing wages, and displacing hardworking Americans. That ends today.” His critique is backed by data. According to the 2025 H-1B Visa Report by MyVisaJobs, U.S. Big Tech firms offer six-figure-plus packages to global talent, while Indian outsourcing firms cluster around $90,000–$105,000—often below U.S. medians. For instance, Google paid an average of $178,184, Meta Platforms nearly $199,944, Microsoft around $163,672, and Amazon Services $149,812. In contrast, TCS offered $105,529, Infosys $103,102, Wipro just $93,146, and Tech Mahindra $103,525. These firms often file for lower wage tiers, which pay 20–30% below local medians. The Economic Policy Institute notes that Indian firms file over 70% of H-1B petitions, contributing to 10–15% wage suppression in IT over the past decade.

But while the diagnosis may be accurate, the prescription is proving costly. The tremors of Trump’s H-1B policy are still making waves. As of September 30, 2025, USCIS preliminary data shows a 22% drop in new H-1B filings. Meanwhile, Canadian tech visa applications have surged by 14%, according to IRCC, and Crunchbase estimates a $6 billion projected loss in U.S. startup investment. Perhaps most significantly, the move has caused a diplomatic chill in U.S.-India relations, with India’s Ministry of External Affairs calling the policy “regressive and discriminatory” in a press briefing on September 29.

This was in response to the White House’s defense of the policy, which stated on September 21: “A necessary correction to protect American wages and restore fairness.” But bipartisan voices in Congress are pushing back. Senator Mark Warner (D-VA) tweeted: “We need smart reform, not self-inflicted wounds. Innovation doesn’t wear a passport—it builds our future.”

Indian Americans, many of whom are directly affected, were expecting a strong diplomatic intervention from Prime Minister Narendra Modi. Instead, they were stunned by his silence. While PM Modi did mention GST rate cuts and even found time to comment on cricket during a public address, he made no reference to the H-1B crisis. For many, this silence felt like a missed opportunity to stand up for a community that has long been a bridge between the two nations.

The Indian tech sector, projected to drive 8% GDP growth in 2026 according to NASSCOM, is already absorbing displaced talent. A NASSCOM statement on October 1 urged Washington to reconsider, warning: “Excessive barriers do not protect American workers; they only accelerate talent flight to other innovation hubs.” EU hubs, Canada’s Global Talent Stream, and Hyderabad’s AI corridor are seeing surges in applications. Meanwhile, U.S. firms are recalibrating hiring strategies, with some shifting operations abroad. A Silicon Valley CEO, speaking anonymously to The Wall Street Journal on September 28, lamented: “Overnight, our cost projections for hiring an AI researcher went up by 40 percent. This is not how you stay ahead of China.”

Brookings Institution research shows H-1B workers complement U.S. workers, fill STEM gaps, and expand job opportunities—creating five U.S. jobs per visa. The National Foundation for American Policy warns that restricting inflows could cost 1–2 million U.S. jobs by 2030. The USCIS 2025 Employer Data Hub, released on September 15, shows H-1B demand up 15% year-over-year, driven by AI, biotech, and green energy sectors. A BBC analysis estimates a $50 billion productivity hit in year one alone.

For Indian companies, the policy rekindles memories of earlier tightening under George W. Bush and Barack Obama, when outsourcing giants faced steep visa rejection rates. But the current surcharge is unprecedented in scale and symbolism. It is not just a legal or economic measure—it is a political signal that America is willing to weaponize visas in its industrial strategy. Across Indian campuses, students are already recalibrating career dreams once tied to Silicon Valley. As one IIT Delhi graduate put it in a recent panel discussion: “My parents saw the U.S. as a land of opportunity. For my batch, it feels more like a fortress.”

The policy’s legal future remains uncertain. Immigration law experts argue that the fee lacks statutory backing and may be struck down in federal court. Civil rights groups, including the ACLU, are preparing lawsuits. But even if reversed, the message has been sent: America is no longer a guaranteed destination for global talent.

A Smarter Path Forward

Trump’s focus on wage gaps exposes real abuse, but the $100,000 fee is a miscalibrated response. It hurts Indian techies, yes—but it devastates U.S. innovation, startups, and strategic sectors far more. As the Cato Institute suggests, reform should mean wage floors, anti-abuse audits, and merit-based allocation—not pricing out the talent that fuels America’s edge. Congress must act. Targeted fixes—such as higher wage mandates for outsourcers, tiered visa pricing, and expanded national interest exemptions—can preserve competitiveness without sacrificing fairness. America cannot “Make Great Again” by pushing away the world’s best minds.

About the Authors

Dave Makkar is a U.S.-based Indian entrepreneur, columnist, and global thought leader on immigration, innovation, and diaspora diplomacy. He writes extensively on Indo-American relations, policy reform, and the intersection of technology and human capital. His work has appeared in leading international publications and policy forums.

Onkareshwar Pandey, writing from New Delhi, is CEO and Editor-in-Chief of Observer Global Media Group. With over three decades of experience as an editor across major Indian media houses, he has authored 11 books and is known for his incisive political-economic commentary.