H-1B Visa Fee Hike: Former Indian UN Envoy Calls It a "Tax on Trust" Between India and US

Former Indian Permanent Representative to the United Nations Syed Akbaruddin has criticized the US's steep H-1B visa fee hike as a "tax on trust," warning that it undermines the mutual benefits of the program and risks eroding goodwill between India and the United States.

In an interview with ANI, Akbaruddin compared US President Trump's recent proclamation imposing a USD 100,000 fee hike on the H-1B visa to a barrier on a "bridge of talent," arguing that taxing skilled migration harms both nations and could redirect opportunities elsewhere.

"We must acknowledge that the H-1B visa is a win-win for both sides. Indian engineers saw that as a ladder to global careers and a number of Indians have followed that route and today are in important positions in the US. For American firms, it was also a lifeline to skills they cannot always find at home. H-1B was a bridge between the US and India. However, today, it's not seen as a ladder, but it's seen as a loophole," he explained.

Akbaruddin emphasized the mutual damage of the policy change: "Taxing talent is a race we will both lose. Partners don't choke talent. They actually channelize talent. A USD 100,000 toll on a bridge of talent will hurt both sides of that bridge. It's not one side. And public goodwill is perishable. And we need to handle dreams of young people very carefully. If tariffs are a tax on goods, this toll on H-1B is a tax on trust."

The former diplomat addressed concerns about the impact on high-end Indian employment in the US, highlighting how the program has historically bridged differences between the two nations.

"Thousands of young Indians who have bridged the difference between India and the US have benefited and so has US society. That it's not a situation that should have come about," he noted.

These comments follow Trump's signing of a proclamation that dramatically overhauls H-1B visa petitions. According to the proclamation, new H-1B visa applications will now require a USD 100,000 fee, a substantial increase from the previous USD 1,500 level.

The US State Department clarified that the new fee requirement applies only to individuals or companies filing new H-1B petitions or entering the lottery system after September 21. Current visa holders and petitions submitted before that date remain unaffected. Under the proclamation, the USD 100,000 payment must accompany every new H-1B visa petition filed after the deadline, including entries in the 2026 lottery.

To counter these challenges, Akbaruddin proposed leveraging India's Global Capability Centers (GCCs) as a "home-shoring solution," suggesting they could absorb returning talent and boost exports.

"Global Capability Centres can become India's H-1B visa... Because if you do not allow talent to go out, then work will come inside and talent will migrate here. We need to look at it not as a loss, but as a need to recalibrate... We need to seize the immediate threat that is gone because now they [US] have said that this will only start applying from the next review, which is somewhere in March... If America is hesitating to take talent, Bengaluru should take it, or Canada will take it. Talent will go where opportunity is. And therefore, we need to look at this and plan for the opportunity which is coming," he stated.

Highlighting GCCs' growth trajectory, Akbaruddin cited examples like Novartis in Hyderabad for advanced clinical tests and GE and Airbus in Bengaluru. These centers currently export USD 68 billion annually, with projections reaching USD 128 billion by 2030.

"Today, 68 billion exports go out from GCCs in India. And the prediction is that by 2030, this will become about 128 billion. And they say that the median salaries for these centers are about equivalent to what is Germany's per capita income. You can see how these centers are progressing. They are about 1400 or so right now. And the prognosis is that by 2030, these will become 2400," he explained.

Akbaruddin advocated for a "come home to build" policy, adding, "GCCs need not be Swadeshi. They are companies which are working globally. It is global and local combined. We need to understand that India has to plug into global value chains and global capability centers, but talent is our own. It has to be a mixture of our human resources and investment and innovation coming from outside."

As India recalibrates its strategies following Trump's visa overhaul, the focus may shift to GCCs as a proactive approach to retaining talent and integrating into global value chains.