The story so far: In a softening of stricter immigration controls announced this September, the U.S. Citizenship and Immigration Services (USCIS) clarified on October 20 that current holders seeking an extension or wanting to switch their visa category would not have to pay the $1,00,000 fee to process H-1B applications. This fee would only be applicable to the new applications made after September 21 post-midnight hours in the U.S. (Eastern Time). Though the clarification does offer some reassurance, there is apprehension in various sectors, particularly the IT industry, about the Trump administration’s inward-looking policies.

What is the clarification?

The immigration services department has clarified that those seeking an extension or wanting to switch their visa category, say, from a student’s visa (categorised as F-1) to an H-1B visa, would not have to pay the processing fee. More importantly, the USCIS said the Secretary of Homeland Security could allow for an exception in certain “extraordinarily rare circumstances” wherein the applicant has been determined to serve a certain national interest, and no American is available to fill the particular role, or that making the employer pay the processing fee on the worker’s behalf would undermine the country’s interests. Homeland Security would also look to ensure the applicant does not pose a threat to the security or welfare of the U.S.

What may have prompted the change?

The revised fee announced in September had caused panic not only in India. Concerns centred about the fee making it “cost-prohibitive” for U.S. employers, especially start-ups and small and mid-sized businesses, to hire foreign workers. Several industry groups, including the U.S. Chamber of Commerce argued this went against the objective of the programme which was to ensure “businesses of all sizes can access the global talent they need to grow their operations” in the U.S. In fact, the Chamber this month filed a legal challenge arguing that the revised fee was “unlawful” and must be structured around actual costs incurred by the government in processing visas, not otherwise. Moreover, the complainant argues that U.S. firms, particularly in manufacturing and certain STEM fields, face a shortage in finding domestic workers “qualified and available to fill the roles needed for the company to perform”. In fact, Neil Bradley, Chief Policy Officer at the U.S. Chamber of Commerce, in a blogpost, mentioned the U.S. education system has “not kept pace with the needs of businesses in this global economy”. Reflecting on an “entrenched opposition to change”, among other things, he writes, “Our nation’s failing report card in math and sciences forces business to create their own programmes to address these challenges,” he stated.

The H-1B proclamation announced in September has already had an impact on arrivals to the country. Preliminary data of the U.S. International Trade Administration (ITA) points to a 44% decline on a year-over-year basis in student arrivals from India for August this year. Overall, the U.S. experienced a greater than 19% decline in overseas student arrivals.

Does this open doors for Indian students?

Ajay Srivastava, founder of the India-based Global Trade Research Initiative (GTRI), told The Hindu that the exemption for foreign students removes a “major financial hurdle at the start of their careers”. He elaborates this would allow for a smoother movement from education to employment without the risk of or cost of leaving the country. However, Mr. Srivastava apprehends the decision earlier this month to cap international student admissions [for undergrad] to 15% of total intake with 5% from an individual country would “drastically reduce opportunities for Indian students to even enter the U.S. education system”. “This measure effectively shuts the door for many before they can benefit from the revised H-1B rules,” observed Mr. Srivastava. The proposed cap forms part of a broader 10-point memo sent by the U.S. administration to universities seeking an agreement on a broad range of issues, ranging from foreign enrolment, faculty hiring to encouraging ideological diversity, and not just “woke, socialist and anti-American ideology”.

Policy panic | Why new U.S. visa rules may benefit Indian students

Has confusion been resolved?

Notwithstanding the clarifications, the H-1B proclamation struggles with certain structural concerns. Speaking to The Hindu over email, Kate Angustia, supervisory policy and practice counsel at the American Immigration Lawyers Association (AILA), said the latest clarifications address some of the details on how the U.S. government is implementing their plan. “The USCIS update addresses when a petitioner must submit payment and what is required for petitioners. Prior to the update, these were unknown factors,” she said. Although, Ms. Angustia separately underlined there could be “confusion” with regards to determining the exceptions. “There is not a clear guidance on the standards, and this is a significant departure from the statute,” she states.

The proclamations, as was the case in September, fall amidst a larger backdrop advocating protectionism and strengthening inward-looking prospects, one of them being to tighten immigration. Ms. Angustia noted, “The broader environment is very concerning because U.S. businesses and immigration advocates know that the government could announce a new policy and create confusion again.” Back home, the Department of Economic Affairs in their monthly review for September had observed the fee could cause “disruptions” —particularly on the growth of future remittances and service trade surpluses.

U.S. President Donald Trump is preparing to sign a proclamation that will require a $1,00,000 application fee for H-1B visa applications, among other changes to the programme for highly skilled foreign workers that has come under scrutiny by the administration, according to a White House official.

The Republican President was expected to sign a proclamation as early as Friday (September 19, 2025) restricting entry under the H-1B visa program unless the fee is paid, said the official. Mr. Trump also planned to order changes to the prevailing wage levels for the H-1B programme as a way to limit their use, the official added.

The proposed proclamation was first reported by Bloomberg News.

H-1B visas are meant to bring the best and brightest foreigners for high-skilled jobs that tech companies find difficult to fill with qualified U.S. citizens and permanent residents. The programme instead has turned into a pipeline for overseas workers who are often willing to work for as little as $60,000 annually. That is far less than $100,000-plus salaries typically paid to U.S. technology workers.

The program was created in 1990 for people with a bachelor’s degree or higher in fields where jobs are deemed hard to fill, especially science, technology, engineering and math. Critics say they allow companies to pay lower wages with fewer labor protections.

Historically, these visas — 85,000 per year — have been doled out through a lottery system. This year, Amazon was by far the top recipient of H-1B visas with more than 10,000 awarded, followed by Tata Consultancy, Microsoft, Apple and Google. Geographically, California has the highest number of H-1B workers, according to the U.S. Citizenship and Immigration Services.

Critics say H-1B spots often go to entry-level jobs, rather than senior positions with unique skill requirements. And while the program isn’t supposed to undercut U.S. wages or displace U.S. workers, critics say companies can pay less by classifying jobs at the lowest skill levels, even if the specific workers hired have more experience.

(With inputs from Reuter, AP)