H-1B fee hike shouldn’t hinder trade deal and Indo-US ties
The White House has clarified that its new H-1B visa policy stipulates that the fee of $100,000 is a “one-time” payment and is imposed only on new applicants. Earlier, Commerce Secretary Howard Lutnick had stated that the fee would be paid annually and would apply to both new visas and renewals. This should come as some relief to the IT industry, the government, and people in India, as over two-thirds of H-1B visa holders are Indian nationals. US President Donald Trump is unrelenting in targeting India, notwithstanding the reported signs of thaw in Indo-US ties, and his latest friendly interaction with Prime Minister Narendra Modi. It all started with the 25 per cent tariff on Indian merchandise exports to the US, and then an additional 25 per cent penalty for buying Russian oil. And now, Trump has turned his attention to the Indian IT sector. It has been pointed out that his latest action will hurt America; that may be true, just as high tariffs on goods tend to raise inflation. Yet, these facts do not change the immediate reality: India and Indians will be paying a heavy price for Trump’s political calculus. He has built much of his appeal on the promise of protecting American jobs and punishing countries he accuses of taking unfair advantage of the US trade system.
Therefore, whether or not his policies end up hurting America in the long run is almost beside the point. The short-term burden is being borne disproportionately by Indian businesses, workers, and the government in New Delhi. Unsurprisingly, the Modi government faces a formidable task. On the one hand, it should keep engaging Washington in constructive dialogue, ensuring that lines of communication remain open and trade disputes do not escalate further. Securing a comprehensive trade deal with the United States is critical, not only to restore tariff concessions but also to provide a framework for resolving future disputes. On the other hand, Delhi must also diversify its options. Doubling down on domestic reforms, expanding trade with Europe, Southeast Asia, and Africa, and creating alternative markets for its IT services should become part of Delhi’s strategy. At the same time, it must strengthen its case internationally by emphasising how its integration with global supply chains benefits not just itself but also its partners. For example, Indian IT professionals are not displacing American workers in large numbers; rather, they are complementing them by filling critical skill gaps and enabling US companies to stay globally competitive.
The episode is also a reminder that high-profile photo opportunities and friendly gestures during bilateral summits do not necessarily translate into substantive policy gains. Trump’s actions make it evident that the US is willing to extract costs from India, regardless of rhetorical commitments to partnership. For Delhi, this underlines the importance of pursuing a foreign policy that is both pragmatic and diversified, hedging against the unpredictability of American politics. In the final analysis, while the White House clarification on the H-1B fee provides a brief respite, the broader trajectory remains troubling. The Modi government must not underestimate the seriousness of the challenge. It is not enough to hope that temporary tensions will fade; India must actively work to safeguard its interests, strike a fair trade deal, and normalise relations with Washington before the costs become even heavier.
