U.S. President Donald Trump’s proclamation introduced a $100,000 fee attached to H-1B petitions. After hours of confusion, including internal travel advisories and frantic return flights, the White House clarified the fee is a one-time charge for new petitions only, not an annual toll on renewals or existing visa holders. The clarification arrived on September 20 and the order became effective at midnight on September 21 (U.S. time).
In those intervening hours, companies advised H-1B holders to stay put or get back to the U.S. before the order kicked in, underscoring how operationally disruptive the uncertainty was for talent-heavy teams.
For India, which accounted for ~71% of approved H-1B beneficiaries last year, the rule change lands squarely on the country’s tech workforce and the startups that rely on it.
The Changing Startup Ecosystem
Indian AI and SaaS founders say the fee is already reshaping U.S. hiring roadmaps. Several who had planned to scale in America are moving engineering roles back to India, exploring O-1 for exceptional talent, or defaulting to distributed teams across India, the Gulf and Southeast Asia to sidestep H-1B risk.
The mood music: “reverse brain-drain” is no longer a talking point but a planning assumption. Newsletter coverage capturing investor and founder sentiment frames this as a potential AI/SaaS tailwind at home, if India doubles down on capability building beyond the services “application layer”.
For startups that sell into U.S. enterprises or need onshore presence, expect tighter client staffing, more offshore-first scopes, and slower ramps until legal contours settle. That mirrors what big clients are signalling to their large IT partners: repricing, delayed starts, and reduced onshore headcount while delivery shifts offshore or near-shore from day one .
GCCs: the big structural shift to watch
Across the industry, one consensus forecast stands out: a bigger, faster push into Global Capability Centres. As firms reduce onshore rotations and protect margins, GCCs, no longer back-office but innovation hubs for R&D, finance and operations, are set to expand in India and in time-zone adjacent markets like Canada, Mexico and Latin America.
India already hosts over half of the world’s GCCs and is projected to top 2,200 companies by 2030, approaching $100 billion in market size and up to 2.8 million jobs, a structural cushion for startups that co-build with these centres or hire alumni from them.
The cost reality check
ET’s breakdown sketches the kind of math that drives behaviour change even if you’re a seed-stage founder watching from the sidelines: the sponsorship cost per H-1B, today ~$7,500-$10,000, would leap to ~$90,000 if the proposal holds, and across heavy users could mean $330-550 million in incremental outlay and 7-15% EBITDA compression for marquee IT firms.
When your services partners and enterprise buyers are absorbing that shock, procurement cycles stretch, onsite roles get rationed, and program scopes skew offshore, all of which ripple into startup pilots, co-builds and integrations.
Policy wishlist from India Inc. and why startups should care?
Indian industry leaders are urging single-window clearances for GCCs, startups and research orgs, arguing that India must translate the external shock into faster domestic build-outs.
Their ask: streamlined approvals, fewer touchpoints, and easier compliance to accelerate investment and innovation, a boon for founders trying to stand up teams, labs and partnerships at speed . Entrepreneurs and fintech operators frame the fee as proof that global talent is getting costlier and less mobile, and that India now has a once-in-a-generation opening to anchor world-class talent at home.
What changed and what didn’t?
- Changed: A one-time $100,000 fee for new H-1B petitions; effective from September 21 (U.S. time). Expect more selective sponsorships reserved for business-critical roles.
- Unchanged for now: Existing H-1B holders and renewals are not covered by the fee; the onshore/offshore pendulum will still swing with client needs, but the bias will be toward offshore/near-shore in new scopes.
A founder’s operating checklist
- De-risk hiring routes: For U.S. market roles, pressure-test O-1 pathways for exceptional talent and default to distributed teams where feasible; several Indian startups are already doing this .
- Design offshore-first delivery: Assume clients will cap onsite and push day-one offshore/near-shore; scope projects and SLAs accordingly .
- Leverage GCC gravity: Treat expanding India-based GCCs as enterprise “front doors” for pilots and co-innovation; hiring from and selling into GCCs will likely get easier, not harder .
- Watch legal and timing: The fee targets new filings; existing visas/renewals aren’t covered per the White House clarification. Build this into 2026 hiring and budgeting cadences .
This isn’t the end of Indian talent in America, but it is the end of a playbook that assumed frictionless mobility. Expect fewer H-1Bs, more selective sponsorships, and a decisive shift toward offshore and GCC-led delivery, a mix that advantages startups able to hire and build in India, then sell globally.
As one analyst put it, “a new world order on services economics” is taking shape; founders who adapt their org design and go-to-market around it will move fastest when the dust settles.
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