H-1B shock and the quiet opportunity: why India must build a home for its talent
When Piyush Goyal urged NRIs to “innovate in India” after the U.S. announced a steep H‑1B fee increase, I heard an old refrain echo with new urgency: a crisis for some can be an opening for many Evening news wrap: H-1B visa fee hike sparks panic among Indian IT workers; and more. Goyal’s words were part diagnosis, part call to action. I want to write back — in first person — not as a commentator detached from the field but as someone who has repeatedly urged India to think strategically about its talent, industry and infrastructure.
The abrupt shock — and what it exposes
The U.S. move on H‑1B fees instantly raised costs and uncertainty for millions of Indian tech workers and for global capability centres (GCCs) operating here (Mint explainer on H‑1B reactions). As analysts noted, India’s IT sector—having just posted record services exports—now faces a geopolitical tail‑wind turned head‑wind that can pinch hiring, demand and the high‑value services export model (India’s services exports rise to record high in FY22).
That’s the short story. The longer one is this: for a decade I’ve argued that India’s comparative advantage is not simply cheap labor but a deep pool of engineers and technologists who can be mobilized for higher‑value work. The H‑1B shock is a brutal reminder that over‑reliance on overseas visas and foreign demand is risky. It is also a reminder that policy, technology infrastructure and imaginative incentives can convert disruption into advantage.
I raised this before — and I was not alone
Take a moment: I wrote in 2017–2023 about India as the world’s “brain factory” and the need to re‑imagine services and R&D exports as strategic assets (Brain Inc 2.0; MNC hiring in India). Those posts weren’t nostalgia. They were proposals — practical, technology‑savvy roadmaps — that anticipated precisely the pressures we’re seeing now and proposed how India could respond by building domestic capability and global market reach. I mention this because seeing years‑old ideas reflected in today’s headlines is oddly validating and urgently instructive: we must act now, not rehearse insights.
The core idea I’d like you to notice: I flagged these risks and suggested solutions years ago. Today’s H‑1B shock shows how timely those proposals were — and why we should move quickly to implement them.
What we must do — concrete moves, not slogans
We need policy and programmatic responses at scale. Here are practical actions I’m advocating — some short term, others structural.
1) Build attractive, fast pathways for return and stay — “Return to India with Purpose”
- Offer targeted start‑up and scale‑up visas: 3–5‑year residency + fast‑track company support for NRIs with validated product or customer traction.
- Create generous R&D and equity‑matching grants for returning founders and engineering leads.
- Offer tax‑neutral windows on first‑loss investments to angel funds that back returnee teams.
Why: Talent needs an economic and regulatory home. The US fee shock will now push many to reassess. India must be visibly ready.
2) Fund AI, chips and software IP as national priorities, not just services arbitrage
- Fund mission programs for applied AI and embedded systems (NavIC‑enabled industrial apps, autonomous vehicle stacks, industrial vision).
- Establish 10 regional deep‑tech “Brain Hubs” (GCC + NITs + industry consortia) with seed compute, testbeds and product commercialization teams.
- Subsidize first 1,000 enterprise AI projects for MSMEs to adopt automation, dataops and embedded systems to raise productivity.
Why: The next wave of value is IP and productized services, not labor arbitrage.
3) Make NavIC, satellites and public data the backbone of local innovation
- Mandate NavIC compatibility and local value capture: every device, smartphone, vehicle system should be NavIC‑ready; favor Indian modules in public tenders.
- Release sanitized public transport, mobility and logistics telemetry (anonymized) as curated datasets to spur startups — e.g., smart routing, logistics pooling, urban micro‑mobility platforms.
- Fund NavIC‑based industrial pilots (ports, cold chain, farm logistics).
Why: indigenous satellite navigation + open data create a platform for trillions of rupees in domestic productivity gains — and reduce external tech dependence.
4) Reframe GCCs and exports — from “offshore delivery” to global product engineering
- Incentivize GCCs to anchor core product engineering (not just delivery) in India: mandates tied to concessions.
- Offer matched subsidies for GCCs that transfer source‑code, IP and senior engineering roles to India.
- A focused program for “GCC‑to‑Product” transition: 1,000 engineering teams per year moved from operational work to productization.
Why: GCCs already employ millions. Let them be engines of IP and high‑value export, not just labour pools.
5) Upskill at scale — new curricula + apprenticeship guarantees
- National program for retraining HPC/ML/AI/devops/embedded systems across 200 cities: combination of short modular courses, apprenticeships and project portfolios.
- Make it cheap, fast and employer‑ready: salaried apprenticeships where grads are guaranteed interviews by partner firms.
Why: Firms won’t invest if talent is thin. We must provide both people and pipelines.
6) Tactical trade & diplomacy: reduce leverage risks
- Use the tariff row as leverage to accelerate FDI, tech partnerships and manufacturing deals that anchor critical supply chains here.
- Negotiate commercial pacts where R&D and IP creation is a quid pro quo for market access.
Why: We cannot rely on good will. We need reciprocal economic architecture.
What NRIs and startups should hear from me — a brief note
- If you’re considering leaving the U.S. or rethinking your path after the H‑1B shock, think beyond job‑portability. India offers the chance to lead product teams, to own IP, to build global startups from home.
- Consider joining or founding product‑first teams (AI/edge/embedded/space‑apps). Grants, talent programs and favorable policy windows are beginning to appear — now is the moment to align.
Where my earlier notes map to these recommendations
Several of these are not new to my writing:
- I argued for India to be the “Brain Factory” of the world and to reimagine services as IP and product engines (Brain Inc 2.0).
- I proposed practical steps for GCCs, NavIC leverage and re‑skilling pipelines (MNC Hiring in India; Leveraging NavIC).
The point is worth repeating: I flagged these ideas years ago. Seeing them become central to policy discussion now validates the thinking — and makes implementation urgent rather than optional.
Final, blunt thought
Protectionism and visa shocks will come and go. Technology and policy are what we can control. India has a reservoir of engineering talent, a fast‑growing services export engine, NavIC and a huge domestic market. If we marshal policy, capital and incentives — and if we treat returning talent and GCCs as creators (not just employees) — India will not merely survive a tariff shock. It will prosper.
This is not a consolation prize. It is an economic strategy to transform India from a labour exporter into a global product and IP hub. If you remember nothing else from what I’ve written over the years, remember this: we forecast this inflection. We proposed the levers. Now let’s pull them.
Regards,
Hemen Parekh
