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.

In a further relaxation of its rules relating to the new $100,000 fee on H-1B visas, the U.S. government has said that the fee will not apply to applications for a change of status or an extension of stay in the U.S.

U.S. President Donald Trump had on September 19 signed a proclamation imposing a $100,000 fee on H-1B visas. Hours later, his government clarified that the new fee would only apply to new applications, and would be one-time. 

Guidelines issued by the United States Citizenship and Immigration Services department on Monday reiterated this, saying that the proclamation “does not apply to any previously issued and currently valid H-1B visas, or any petitions submitted prior to 12:01 a.m. eastern daylight time on September 21, 2025”.

“The Proclamation also does not apply to a petition filed at or after 12:01 a.m. eastern daylight time on September 21, 2025, that is requesting an amendment, change of status, or extension of stay for an alien inside the United States where the alien is granted such amendment, change, or extension,” the guidelines added.

Notably, they also said that the proclamation does not prevent any holder of a current H-1B visa from travelling to and from the U.S. 

The U.S. Chamber of Commerce had last week filed a lawsuit challenging the $100,000 fee, saying it overrides existing provisions in current laws that apply to the H-1B programme. 

In particular, the chamber said that the fee overrides provisions of the Immigration and Nationality Act that govern the H-1B programme. 

The H-1B visa, and any related fees, are of particular interest to Indians since they are the largest beneficiaries of this visa programme. 

While the U.S. government does not share data on the number of H-1B visa holders currently in the U.S., other sources, such as FWD.us, an immigration and criminal justice reform advocacy body co-founded by Meta chief executive officer Mark Zuckerberg, say that there were 7.3 lakh H-1B visa-holders in the U.S. as of January of this year. Of these, about 70% were Indian. 

Further, as per data with the USCIS, Tata Consultancy Services had 5,505 H-1B visas approved in 2025 as of end-June, the second-highest globally that year, after Amazon (10,044). 

Other Indian companies that have significantly benefited from the H-1B programme include Infosys (2,004), Wipro (1,523) and Tech Mahindra Americas (951).