Amid delay in finalisation of US-India trade deal, the US administration under Donald Trump has fired another salvo towards India. After imposing a higher entry fee of $100,000 for new applicants of H1B, the Trump administration, now, has announced another significant change.

The current method of ‘lottery’ system will now be scrapped. So far, H1B visas are granted based on a ‘lottery’ system. This is because far more people apply for entering into US than the annual limit of 85,000 visas. The system now will eliminate this lottery. Instead, a new system will now be followed.Under the new rule, H1B visa applications will be weighted based on wage levels set by the US Department of Labour (DOL).

Applicants offered higher salaries will have a better chance of selection.These new rules will be effective from February 27, 2026. With this change, the US administration has shown its intent to welcome only experienced and high-skilled professionals. Time and again, the supporter base of Trump are alleging that low-skilled employees are entering into the US under the H1B visa rule as the US companies are replacing American workers with cheap foreign workers. With the new norms, young professionals will find it difficult to move to the US under the H1B visa programme.

As a major beneficiary, India will be the most impacted due to the new norm. Global technology companies including Indian IT services companies rely on H1B visa route to send professionals to the US for working on client projects. While Indian IT companies like TCS, Infosys, HCLTech, Wipro and many others have significantly reduced their dependence on this immigration route by localising their workforce in the US; reliance of American technology giants like Microsoft, Meta, Google, and several others remains high. So, such restrictions may impact their ability to hire Indian technology talent for sending them to their US offices.

Notably, the writing was on the wall with regard to H1B visa programme for several months. After imposing a high entry fee, reports started appearing that the US visa applications are facing undue delays as theauthorities are following a restrictive approach towards new approvals. Many of the visa interviews scheduled for January 2026 have been pushed forward to September, reports have said. These are signs that the MAGA base of Trump supporters are getting an upper hand in the policy making.

If this continues, Indian techies’ American dream may be over for now. Sources in the know said that many Indian IT firms have stopped applying for H1B visas altogether. Given the high entry fee, procedural delays and other bottlenecks, they are pursuing clients to get the project work done from offshore locations like India or from near shore locations like Mexico and Canada. Reflection of more work getting done from India is already seen.

Industry sources are hinting that given the cost pressure on clients, they are willing to get their project work done from offshore locations like India. Not only that, the pace of foreign companies setting up technology centres or Global Capability Centres (GCCs) in India has gone up in 2025. More companies are opting India as their technology centre given the high talent availability, cost advantage and supportive infrastructure.

This augurs well for Indian technology ecosystem. Already, several global technology giants like Google, Microsoft, Amazon, Accenture, Cognizant have unveiled plans to invest billions of dollars in India to boost their AI offerings. So, with H1B or without H1B visa, India’s technology industry holds a pole position in the global technology world.