On 19th September, US President Donald Trump has signed a proclamation mandating payment of $100, 000 for each H-1B visa applied. Here are the details of his newest salvo against the Indian IT sector.  

What does the newest Presidential proclamation on H1- B visa say?  

The new proclamation seeks payment of $100,000 for new H-1B visa petitions for non-immigration H-1B every year. Anyone with H-1B visa currently living outside of US, can be denied entry starting from midnight of September 21, 2025, EST. However, the Secretary of Homeland Security can also make exemptions to hiring under H-1B specialty if it serves national interest of US.

Employers will now have to maintain records of such payments prior to filing an H-1B petition and even the renewals of H-1B will go through greater scrutiny. With in 30 days of the completion of the H-1B lottery the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security will have to submit to Trump a recommendation whether to provide an extension or renew the entry of such visa holders.  

What is the US President Trump accusing IT servicing firms of?  

In his proclamation, Trump has accused IT outsourcing companies' firms of manipulating H-1B visa which is harming American talent and making it difficult for college graduates trying to find IT jobs due to wage disparity. Trump claims among computer and math occupations, the share of foreigners in the workforce grew from 17.7% in 2000 to 26.1% in 2019 due to  abuse of the H-1B visa. 

Trump has made references to American tech companies like Microsoft and Intel laying off American workers and hiring H-1B instead without naming in the proclamation. “One software company was approved for over 5,000 H-1B workers in FY 2025; around the same time, it announced a series of layoffs totaling more than 15,000 employees.  

Another IT firm was approved for nearly 1,700 H-1B workers in FY 2025; it announced it was laying off 2,400 American workers in Oregon in July.  A third company has reduced its workforce by approximately 27,000 American workers since 2022, while being approved for over 25,000 H-1B workers since FY 2022.  

A fourth company reportedly eliminated 1,000 jobs in February; it was approved for over 1,100 H-1B workers for FY 2025”, the statement of proclamation read.  

What is the current system of US immigration for high –skilled work visas?  

Currently the U.S. Citizenship and Immigration Services caps the issue of number of H-1B visa and has a process of lottery system. For fiscal 2026, US had a ceiling of 65,000 H-1B visa regular cap and the 20,000 H-1B visas under U.S. advanced degree exemption, known as the master’s cap.

The cap however is exempt for those who have previously received the visa and are allowed to file for an extension of time, change employers or work other jobs apart from the H-1B positions 

How are Indian companies likely to be impacted by the new policy?  

Currently IT services firms are one of the largest beneficiaries of the specialized work visa categories with Indians being the highest to whom such visas are issued. Big IT firms like Tata Consultancy Services, Infosys, Wipro, Cognizant, Accenture which apply every year for such visas will now see increased cost and the threat of greater rejection of applications. These increased costs could see realignment of the delivery models of these companies. In the short term while outsourcing firms could absorb the cost for projects delivered in US , in the medium to long term, apart from those like government contracts, other projects could be outsourced to a far greater extent.