"Startups may face hiring challenges," says former advisor Ajay Bhutoria on USD 100,000 annual fee on H-1B visas

H 1B Visa

Ajay Bhutoria, former advisor to ex-US President Joe Biden, stated that the imposition of an annual fee of USD 100,000 on H-1B visas is a " bold step" by the Trump administration to uplift senior citizens.

Bhutoria warned that this decision could create challenges for start-ups and advised for "targeted exemptions" to keep the US technology sector strong.

"This USD 100,000 H-1B fee, effective Sept 21, 2025, is a bold step that could uplift U.S Citizens Senior IT workers and new college grads by reducing reliance on lower-cost foreign labor, ensuring fair wages and opportunities for American talent, while also supporting innovation--though startups may face hiring challenges, so a balanced approach with targeted exemptions is essential to keep our tech edge strong," he said.

Additionally, Khawnderao from the Foundation of India and Indian Diaspora Studies (FIIDS) termed the decision as an "unfortunate" one that can have a "very negative" impact on the US tech industry.

"The 100k fee for H1Bs is a very unfortunate policy with a huge negative impact on business, particularly the software/tech industry, as well as US-educated STEM talent who are already struggling due to the negative impact of AI and tariffs. We need to educate about talent shortages and their negative impact, especially on startups and smaller tech companies, making it difficult for them to innovate and compete," he said.

The Trump administration has announced a massive increase in H-1B visa fees, imposing a USD 100,000 annual charge that will fundamentally alter how American companies hire skilled foreign workers, particularly impacting Indian IT professionals who comprise the largest group of beneficiaries.

Commerce Secretary Howard Lutnick revealed the changes during a Friday press call, describing the fee hike as a deliberate strategy to eliminate what the administration considers lower-skilled training positions while preserving opportunities for highly skilled workers.

The new USD 100,000 annual fee represents a dramatic increase from current H-1B processing costs, which typically amount to a few thousand dollars. Companies will pay this fee on top of existing vetting charges, with the administration still deciding whether to collect the full amount upfront or annually.

The fee applies to all H-1B positions regardless of salary level or skill requirement, making the programme economically viable only for roles that justify the substantial cost.

This change could significantly impact Indian IT services companies like Infosys, TCS, and Wipro, which have historically used H-1B visas to bring junior and mid-level engineers to the US for client projects and skills development.