Business leader Vikas Vij has warned that India’s IT sector faces its “biggest crisis yet” after US President Donald Trump dismantled the H-1B visa system with a new proclamation.
The order imposes a steep annual fee of $100,000 per employee, even for renewals. This makes it too costly for companies to depend on foreign workers. The proclamation also bars existing H-1B holders from international travel. Firms like Microsoft have already told employees to return to the US immediately.
Commerce Secretary Howard Lutnick said the six-year renewal cycle could cost employers $600,000 per worker, discouraging them from hiring H-1B talent. The US government accused Indian IT outsourcing firms of abusing the system. Reports say TCS is under investigation for discriminatory layoffs of American staff.
India accounts for 71% of all H-1B approvals, with nearly three lakh Indian workers in FY2024. Most are in IT services, putting the $250 billion sector at serious risk. The industry contributes 7% to India’s GDP and supports millions of indirect jobs.
Vij also highlighted India’s weak R&D investment, stuck at 0.7% of GDP. Without innovation, he warned, India risks falling into a “tech trap” and losing long-term competitiveness.
