WASHINGTON D.C., Dec. 28, 2025 — The U.S. government’s sweeping changes to the H-1B skilled work visa program have sparked significant concern among industry leaders and economists about their potential impact on both the American and global tech and services economy. At the center of the debate is an estimated $198 billion economic contribution tied to H-1B visa holders — a figure highlighted by the National Association of Software and Services Companies (NASSCOM) in a recent warning to policymakers.

The H-1B visa has long been a cornerstone of U.S. immigration policy for attracting highly skilled foreign talent, particularly in sectors such as information technology (IT), engineering, and research. Under the 2025-26 reforms, the current random lottery selection system is being replaced with a wage-weighted selection process that prioritizes applicants with higher salaries and advanced skills, a shift critics say could disadvantage smaller companies, early-career professionals, and research institutions.

Key Components of the H-1B Reform

1. Wage-Weighted Selection Replaces Lottery System
The U.S. Department of Homeland Security’s overhaul will replace the lottery process — where all qualified applicants had an equal chance — with a system that gives multiple entries to higher-paid foreign workers. This new rule, set to take effect in early 2026, aims to align visa issuance with high-wage, high-skill employment. Critics argue this may reduce opportunities for mid-level and emerging talent.

2. Massive Visa Fee Increase
In September 2025, the U.S. introduced a dramatic hike in the H-1B visa application fee to $100,000 for new applications — a drastic jump from the previous range of approximately $2,000–$5,000. The fee applies to initial petitions filed from outside the U.S. and has already faced legal challenges, although a federal judge recently upheld the regulation.

Economic Concerns and Industry Response

Industry bodies such as NASSCOM have sounded the alarm over the changes, saying they represent a major departure from longstanding practice and could significantly disrupt hiring and innovation in the tech ecosystem. Indian professionals, who comprise a large share — over 70 % — of H-1B holders, are particularly affected, raising concerns about global talent flows and bilateral economic ties.

NASSCOM emphasizes that the H-1B program contributes billions in economic output and supports millions of skilled jobs in the U.S., and that abrupt policy shifts could undermine this contribution. The estimated $198 billion impact figure reflects the broader value associated with Indian IT services and other talent reliant on the H-1B system.

Economic analysts note that while the reforms aim to protect U.S. wages and guard against abuses of the system, they may have unintended consequences — including reduced competitiveness, project delays, and higher operational costs for firms that depend on international talent.

Market and Talent Pipeline Effects

The visa reforms have already influenced corporate behaviour. Reports suggest that major technology companies and immigration lawyers are reevaluating sponsorship plans, with new applications dropping substantially in some sectors. Increased scrutiny of social media histories and stringent vetting procedures have also added uncertainty for both employers and prospective workers.

Social media discussions suggest that some tech roles are being offshored — with tens of thousands of jobs reportedly added in India by U.S. firms — indicating early shifts in staffing strategies as companies adapt to the new visa regime.

Looking Ahead

While supporters of the reforms argue the changes will modernize the visa system and prioritize genuinely high-skill roles, industry advocates are calling for phased implementation and clearer guidance to ease the transition. Without careful calibration, the reforms may alter long-standing talent flows, reshape offshore delivery models, and affect innovation ecosystems both in the U.S. and abroad.

In summary, the reform of the U.S. H-1B visa — including the shift to wage-based selection and steep fee increases — has broad implications for the tech and services economy, raising concerns about reduced access to skilled workers, potential offshoring of jobs, and significant economic contributions being at risk.