H1B Visa Reforms Insufficient to Safeguard India’s AI Future
Trump’s $100,000 H1B fee may slow the brain drain, but India must bolster infrastructure, R&D, and startup ecosystems to truly benefit from its talent pool.
The Trump administration’s recent announcement of a $100,000 fee for new H1B visa applicants has sent shockwaves through India’s tech community and diaspora. With over 70% of H1B holders being Indian, many contributing to global AI and large language model development, the move has significant implications for India’s talent flow. Existing H1B visa holders are exempt from the fee, but the impact on new applicants has reignited discussions on India’s ability to leverage its human capital in the AI revolution.
While the fee hike may reduce the outflow of skilled professionals to the United States a longstanding issue for India it is not a silver bullet for AI progress. Factors such as inadequate infrastructure, limited research and development (R&D) spending, and an underdeveloped startup ecosystem continue to hinder India’s ability to fully harness domestic talent. For context, India allocates only 0.6–0.7% of GDP to R&D, with just 36% of that coming from the private sector, compared with over 70% in countries like the U.S., China, and South Korea.
The shortage of quality infrastructure and supportive business environments has historically driven talent abroad. Despite retaining more skilled professionals, India faces challenges such as complex corporate taxation, bureaucratic inefficiencies, and insufficient funding for AI-focused research. Additionally, wage pressures may rise temporarily due to increased domestic competition among AI professionals, potentially offsetting the benefits of retaining talent.
Experts stress that simply keeping talent within India will not suffice. Policymakers must focus on increasing R&D investment, creating a conducive startup ecosystem, improving ease of doing business, and enhancing living standards. Without these measures, India risks underutilizing its skilled workforce and lagging further behind in the global AI race.
Decisive action now could turn the H1B fee change from a temporary retention of talent into a long-term opportunity for India to strengthen its AI capabilities and assert itself as a major player in the technology landscape.
