Will Trump’s H1-B visa reforms hurt Indians?

The United States is planning a major revamp of the H-1B visa programme for highly skilled foreign workers. The reforms could entail a shift from the lottery system — a random selection process – to a wage-based process.

US Secretary of Commerce Howard Lutnick recently said the Donald Trump administration is looking to overhaul the current immigration system, specifically the H-1B visa programme and green cards. The changes to the H-1B system will have a significant impact on Indians, who are its biggest beneficiaries.

Let’s take a closer look.

What are H-1B visas?

The H-1B visa programme allows employers in the US to temporarily hire foreign workers in speciality fields. To get the visa, an employee must possess a specialised degree, a license or training required by the job role.

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The non-immigrant visa is typically valid for up to three years and can be renewed for another three years. However, it can be extended if the American employer sponsors the worker for permanent residency, which allows foreigners to live and work in the US.

Most H-1B visa holders are from India, followed by China.

Currently, the H-1B visas for high-skilled foreign workers are capped at 85,000 per year, including a 20,000 exemption for individuals with an advanced degree from a US university.

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Amazon tops the list of American employers with the largest number of H-1B workers since 2020, as per the nonpartisan Pew Research Center.

What US Secretary of Commerce said

US Commerce Secretary Howard Lutnick on Monday (August 25) said he is involved in the process to replace the lottery-based H-1B system with a wage-based system.

In an interview with Fox News, he said, “I’m involved in changing the H-1B programme. We’re going to change that programme… We’re going to change the green card.”

“We give green cards - the average American makes $75,000 a year and the average green card recipient $66,000 a year,” Lutnick said, asking, “Why are we doing that? It’s like picking the bottom core.”

He added, “That’s why Donald Trump is going to change it - that’s where the Gold Card is coming, and with that we’re going to start picking the best people, and it’s time for that.”

Taking to X, Lutnick labelled the current H-1B system as “a scam that lets foreign workers fill American job opportunities” and said “hiring American workers should be the priority of all great American businesses.”

The current H1B visa system is a scam that lets foreign workers fill American job opportunities.

Hiring American workers should be the priority of all great American businesses. Now is the time to hire American. pic.twitter.com/l27HEhF7C3

— Howard Lutnick (@howardlutnick) August 26, 2025

As per a Bloomberg Law report, the US Department of Homeland Security stated in its recent regulatory agenda that it plans to present a proposal in August to fix the allotment of H-1B  visas on wage-based levels for available positions.

The White House proposed the change on August 8, Bloomberg Law reported. Once the proposal appears in the Federal Register – the daily public report that has notices of proposed federal rule changes, a window for public comments will be opened.

It could take months for the final rule to be implemented. It can, however, be challenged in court.

Impact on Indians

Trump’s crackdown on immigrants is bad news for Indian green card holders, students and workers. As the US administration now moves to overhaul the H-1B visa system, nationals from India would have to bear the brunt.

This is because Indians have accounted for more than 70 per cent of all approved H-1B petitions since 2015, as per the US government data.

The US approved 400,000 H-1B applications for high-skilled foreign workers in 2024, as per Pew Research Center.

In the fiscal year ending September 2023, Indians made up 68,825 (58 per cent) of initial employment visas and 2.10 lakh (79 per cent) of extensions.

If the new wage-based system is implemented, the US will start preferring employers that pay higher wages to foreign workers. This would affect the recent foreign college graduates from earning in the US, as they tend to get lower wages.

Malcolm Goeschl, a San Francisco-based lawyer, told Politifact, as per an Al Jazeera report, that the likely H1-B visa overhaul will benefit tech companies, including those specialising in artificial intelligence (AI). Such companies pay high salaries, even for entry-level positions.

“There will likely be plenty of lottery numbers available at the top of the prevailing wage scale, but very few or none at the bottom,” Goeschl said. “You may see young graduates shy away from the US labour market early on because of this. Or you could see companies just pay entry-level workers from other countries much higher salaries to get a chance in the lottery, leading to the perverse situation where the foreign workers are making a lot more money than similarly situated US workers.”

David Bier, director of immigration studies at the libertarian Cato Institute, said the new rule would put the occupation of teachers at a disadvantage.

“The short-term benefit would be the people who get selected are more productive, but the long-term cost might be to permanently redirect future skilled immigration to other countries,” Bier told Politifact. “It would also effectively prohibit the H-1B for many industries that rely on it. K-12 schools in rural areas seeking bilingual teachers, for instance, will have no chance under this system.”

The expected revamp comes amid a partisan debate in the US on H-1B visas. Proponents say the current system helps America plug the gap by hiring skilled foreign workers, but critics point to fraud or abuse cases and say the focus should be on hiring Americans.

With inputs from agencies