The recent news about Donald Trump’s administration imposing a one-time $100,000 fee for new H-1B visa applications is certainly a development that warrants deep reflection. When I read that global tech startups outside the US are purportedly “happy” with these new rules, it immediately took me back to conversations I initiated years ago about the strategic advantage of talent pools like India's.
The Cost Arbitrage Revisited
Back in 2017, in my blog post Brain Inc 2.0, and reiterated in MNC hiring in India and another version of MNC hiring in India, I highlighted a significant reality: the salary arbitrage in the tech industry. I noted then that Indian R&D firms were paying their employees an average of $22,000 per year, compared to the $88,000 per year typically paid to H-1B visa holders in the U.S. This meant Indian engineers could be hired at a quarter of the cost. At the time, I asked: "With this kind of ‘Cost Advantage‘, is there a possibility to do better than the projected earnings of $40 billion in 2020?"
Now, with this new $100,000 fee, a policy enacted via presidential proclamation between September 21, 2025, and September 21, 2026 [H-1B visa - Wikipedia], the cost disparity becomes even more pronounced. What was once a roughly $1,500 application fee The Washington Post has skyrocketed, making it astronomically more expensive for U.S. companies to bring in new H-1B talent. It's a striking validation of my earlier insight into the profound impact of cost on global talent movement.
The Rise of Global Brain Factories
This dramatic shift in U.S. visa policy, intended to prioritize "Buy American, Hire American" Forbes, creates an undeniable impetus for talent to remain and flourish in their home countries or other receptive nations. It strengthens the argument for what I envisioned as "INDIA : the BRAIN FACTORY of THE WORLD" MNC hiring in India. When the barriers to entry in one major market become so high, the natural response is for talent, innovation, and investment to flow to places where they are welcomed and can operate more cost-effectively.
I’ve consistently advocated for India's immense potential, particularly in technology and AI. In my blog post Our Own AI Systems : On the Way, I discussed India's trajectory as an AI-driven economy, and in AI Embedded: Infosys, I noted the "irresistible allure of AI for investors and innovators alike, especially within the Indian startup ecosystem." This latest H-1B development accelerates that trend, making regions like India even more attractive for cultivating high-skilled professionals.
The happiness of global tech startups outside the US, as reported, isn't just about avoiding a fee; it's about a clearer pathway to talent acquisition and a stronger justification for developing robust domestic and regional tech ecosystems. It means that the "cost advantage" I spoke of years ago has now been amplified by policy, creating an environment where other nations can truly cement their status as global talent and innovation hubs.
Reflecting on how these ideas have unfolded, it underscores the critical importance of strategic foresight in immigration and economic policy. The flow of intellectual capital is fluid, seeking paths of least resistance and greatest opportunity. When one door becomes harder to open, others become more appealing, driving innovation and growth in unexpected corners of the world.
Regards,
Hemen Parekh
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