H1B fee to dampen fresh applications, spur offshoring in coming months: Mohandas Pai
Dismissing the notion that companies use H-1B visas to send cheap labour to the US, Pai pointed out that the average salary paid by the top 20 H-1B employers exceeds $100,000, and criticised what he termed as misplaced "rhetoric carrying on."
Former Infosys CFO and industry veteran Mohandas Pai on Saturday said the US move to impose a steep $100,000 annual fee on H-1B visa applicants will dampen fresh applications by companies and may accelerate offshoring in coming months.
US President Donald Trump has signed a proclamation that will impose $100,000 annual visa fee for highly skilled workers. The H-1B nonimmigrant visa programme was created to bring temporary workers into the US to perform additive, high-skilled functions, but it has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labour, Trump said in the proclamation.
Dismissing the notion that companies use H-1B visas to send cheap labour to the US, Pai pointed out that the average salary paid by the top 20 H-1B employers exceeds $100,000, and criticised what he termed as misplaced "rhetoric carrying on."
An IT industry expert who did not wish to be named said that the fresh approvals for Indian tech companies range from 8,000-12,000 every year. The impact is not just on Indian companies but also on global tech giants like Amazon, Google, and Microsoft which account for significant H-1B numbers to get "the best talent" to the US. The fee of $100,000 is way too high, the source said.
Meanwhile, Pai pointed out that the impact will be "limited" for now, as it only affects new applications, and existing H-1B visas are "safe".
"It has got limited application, because...it doesn't apply to all the H-1B visas which are already there. So there could be only an impact on anybody applying in future, new applications will come down. Nobody's going to pay USD 100,000, that is very true," Pai told PTI.
He argued that, as such, H-1B wages are "not cheap".
"People pay more than $100,000 as salaries, they're not cheap. If they pay their staff $100,000 they charge their clients $150,000-160,000, so all this idea of sending cheap, low-skilled people, that doesn't hold water," Pai said.
Going forward, companies are likely to increase offshoring.
"Now what will happen is everybody will work to increase offshoring...because it doesn't make sense, first, you don't get talent, second, the costs are too high they'll increase offshore. That will happen over the next maybe six months to one year. So we have to wait and see what happens, but right now, for 3-6 months, it will not have any big impact," he said.
Pai has, in the past, maintained that Indian IT firms' dependence on H-1B visas has significantly decreased over a period of time, highlighting that data indicates many leading American tech companies are in fact among the top applicants for these visas.
A look at the USCIS website shows that for fiscal year 2025 (data as on June 30, 2025), Amazon topped the list of H-1B visa approvals at 10,044.
In that list of top ten beneficiaries, TCS (5,505) is at the second spot followed by Microsoft Corp (5,189), Meta (5,123), Apple (4,202), Google (4,181), Cognizant (2,493), JP Morgan Chase (2,440), Walmart (2,390) and Deloitte Consulting (2,353). The top 20 list includes Infosys (2,004), LTIMindtree (1,807), and HCL America (1,728).
An industry expert noted said that the latest move by the US would slow down innovation in the US.
Congress has set a mandated cap of 65,000 H-1B visas with 20,000 additional H-1B visas for professionals who have obtained a master's degree or higher from an accredited US institution.
According to USCIS website, the H-1B programme allows employers in the United States to temporarily employ foreign workers in occupations that require the theoretical and practical application of a body of highly specialised knowledge and a bachelor's degree or higher in the specific specialty, or its equivalent.