MAGA At The Cost Of India

The astronomic H-1B visa fee hike President Trump promulgated on Friday has for now handed a victory to hardline sections in the ‘Make America Great Again’ (MAGA) campaign. Independent of speculation over the duration of the hike and whether the move can survive legal challenges, the announcement has sown needless confusion around the technology sector, with Microsoft, Amazon and JP Morgan, among others, scrambling to put out relevant advice to their employees. The timing of the decision is especially significant for New Delhi, as the hefty $100,000 application fee for this non-immigrant category visa is expected to disadvantage Indian firms, its predominant beneficiaries. The step comes close on the heels of the doubling of tariffs in late August on exports from the country to 50 per cent, among the highest in the world, in retaliation against New Delhi’s imports of Russian oil. Another move that will pile pressure on India is the Halting International Relocation of Employment (HIRE) Act 2025, a private member bill recently tabled in the Senate that targets American firms deploying overseas workers. The bill seeks to impose a 25% tax on businesses for the payments they make to foreign workers for services consumed in the US and to bar companies from claiming tax rebates against such payments. While the measure will wind its way through Congress for several months, it has raised concerns of a potential disruption to India’s $280 billion technology services outsourcing industry.

Although concerns over the displacement of domestic workers under H-1Bs predate President Trump’s ascent to the White House, the issue has acquired enormous resonance in today’s polarised climate of anti-immigration crackdown. Critics argue that the programme has been systematically abused on a large scale to replace rather than supplement American workers with low-skilled and low-paid labour. Friday’s executive order has singled out the influx of Science, Technology, Engineering and Mathematics (STEM) workers—information technology firms in particular—into the US for the exploitation of the H-1B scheme. Commerce Secretary Howard Lutnick is among those who are adamant that employment opportunities must be opened for highly qualified citizens who pass out of world-renowned US universities.

Trump Pulls Another Controversial Idea From His MAGA Cap, This Time It's American Compliance

But Silicon Valley behemoths, heavily reliant as they have been on overseas workers, have baulked at the scheme’s critics. Most notable among them is the South African immigrant Elon Musk, Tesla chief and President Trump’s biggest election financier, who last year spoke of a tremendous shortage of high-skilled and motivation engineers in the US, remarks that caused an uproar in the MAGA movement.

Whatever the fallout from the H-1B visa action, it is unlikely that President Trump would pause to reflect that he could be shooting himself in the foot. In the same manner that the worldwide punitive reciprocal tariffs have forced companies to explore relocating their operations to countries subject to less harsh levies, it is not inconceivable that they shift high-value activities outside the US.