The announcement shocked the company and caused a wave of confusion. Trade Minister Howard Lutnick initially proposed that the fine would be annual and relate to the existing visa holders, panic with global companies. On Saturday, the White House explained that the fee would not apply to the existing visa holder, which would be of one -time nature and would not start until 2026. Shares of Indian technological shares dropped on Monday.
Proponents of H1-B Visa issued through a lottery, claiming it is important to fill in a gap for highly qualified jobs to keep the US at the tip of the innovation. Critics say it is undermined by US workers. The three largest business users Visa are Amazon.com, Tata Consultancy Services and Microsoft, according to American citizens and immigration services.
The National Association of Software and Services stated that a delayed beginning would give the company time to speed up programs to train US workers and strengthen local charge. Indian and India focused companies in the US have already reduced H-1B visas according to the business group of 14,792 visas issued to these companies to 10 162 in 2024. In these visas, these visas are on these visas on these visas. For Indian or Indian companies focused on technological services such as Tata, Infosys and Cognizant, which are strongly relying on such visas, a change in the latest challenges for their business prospects, including the adoption of generative AI, tariffs and wider uncertainties that have caused companies to stop.
Anuj Aggarwal, assistant portfolio manager of the Baron Emerging Markets Fund and Baron India Fund, expects the fee to be in the near future in the middle of the digital intervention for profitability for Indian IT services. Aggarwal says that the higher fee could eventually be divided between a company and employees that would receive a lower wage, minimizing the impact.
This means that Aggarwal says it is underweight because of their other challenges. The fee only increases the pressure.
The IT service industry represents an estimated 7% to 10% of the Indian economy, but supports a significant part of its upper -class consumer, the main growth driver, says Nick Niziok, a leading investment in Calamos.
Investors were positive about the longer -term economic prospects in India and it was popular among global investors. However, Niziolek says he carefully monitors the impact of IT sector problems on the wider economy.
Baron’s Aggarwal sees the possibility that the fee really helps if global companies are pushing more to invest in the centers of the capabilities that they have built in India and hire more local workers. The change in visa is unlikely to reduce remitting from the Indians in the US, because the shift of policy does not reduce the number of visa applicants. Instead, this leads to redistribution so that the visa goes more and more to higher earnings, such as a sought -after scientist from Carnegie Mellon, earning $ 300,000 in a technology company over a technical worker, so less than half.
Political observers are more concerned about the impact on the relationship in India, USA, after a voltage after the US hit India 50% of tariffs, including 25% of the punishment for buying Russian oil. Indian nationals are the largest recipients of H1-B visas.
“It must be a step backwards (when repairing a relationship),” says Christopher Smart, a management in the field of advice in the Arbroath Group investment strategy, which noted how policy was introduced. “It was almost like a day of liberation where there were shocking subtitles that were then walked. (IT) It creates uncertainty about how and why you want to do business in the US”
This step may be another reason why companies are trying to increase investment elsewhere in Singapore or Toronto, Smart said.
Qualified mobility and talents exchange “contributed extremely” to the development of technologies, innovation, economic growth, competitiveness and wealth creation, the Indian Ministry for External Affairs said. He also noted that this step could cause disturbances of families, which government hopes that US authorities can “solve” appropriately.
India and the US have been trying to strengthen their relationship for about ten years, especially because the US is looking for its growing rivalry with China. However, the US deposited 50% of tariffs in India, making it one of the most difficult interventions. This included 25% fine for buying Russian oil, although the US saved China, larger buyers of Russian oil.
Indian business negotiators are back in the US this week in the hope that these tariffs will decrease. While India may want the US to make some effort to mitigate the impact of visa changes-and the company can find ways to solve exceptions-the business is focused on business and is unlikely to add too many other elements to the business discussion.
Write Reshma Kadadia at RESHMA.KAPADIA@BARRONS.com
(Tagstotranslate) H1-B Visa (T) Indian Technology Society (T) US-India Relationship (T) Qualified Jobs (T) Visa Fees
