India's Career Dreams Under Threat
President Donald Trump's decision to hike the H-1B visa fee has dealt a devastating blow to India's youth, whose career aspirations are already facing immense challenges in the job market. The $100,000 entry fee, imposed by employers on foreign workers entering the US under the programme, will effectively gut it, forcing large outsourcing companies such as Infosys to rethink their business strategy.
India accounts for more than 70% of all H-1B visas, and the new rule has sent shockwaves throughout the country. The Indian government should be worried about how this new regulation is being implemented, as it appears to be an economic sanction, escalating the 'punishment' that Trump has meted out to a staunch ally in recent months.
The Struggle is Real: Middle-Class Families in Anxious Wait
Trump's move left many middle-class Indian families in extreme anxiety over the weekend. H-1B visa holders who were overseas on work or holiday were told by their employers to make it back before 12:01am Eastern time on September 21st, risking being stranded indefinitely or facing uncertain futures for their spouses and children.
Even those currently in the US would ask companies to move them elsewhere, but where? The US tech and finance industries have at least a couple of options besides mass relocation of foreign-born talent. They could challenge the legality of the entry fee or seek carve-outs, such as exempting foreigners with US college STEM degrees.
The Impact on India's Economy
The problem is much bigger for India, where adding services to a trade war that New Delhi didn't see coming may have done more than shave off a few percentage points from outsourcing firms' margins. A quarter-century of closer political alignment with the US had a solid economic foundation, with large US firms propelling India's rise in software services exports.
However, this business model is already facing an existential threat from artificial intelligence (AI), which is hacking away at entry-level jobs. The latest targeted punishment by the Trump administration is doubly dangerous, taking place against a backdrop of high youth unemployment and unrest in neighbouring countries like Sri Lanka, Bangladesh, and Nepal.
A Toxic Mix for India's Economy
It's a tricky time for Washington to repel India from its geopolitical orbit, and to take away opportunities from the world's biggest cohort of youth—one by one. With wages under threat for both blue- and white-collar workers in India, Indian consumers might be wary of making big-ticket purchases.
Trump's actions may have made sure of that. In a televised address on Sunday, Prime Minister Narendra Modi struck an optimistic note, saying the reduction in the GST from Monday would "accelerate India's growth story." However, with the H-1B visa fee hike, it seems like the country is facing a toxic mix for its economy.
A Call to Action
The Indian government and businesses must act quickly to mitigate the damage caused by Trump's decision. They can challenge the legality of the entry fee, seek carve-outs, or explore other strategies such as substituting talent with transactions.
It's time for India to take a stand against this discriminatory policy and protect its youth from being left behind in the job market. The future of US tech dominance is uncertain, but one thing is clear: Trump's H-1B visa fee hike has hit India's youth where it hurts—their career dreams.