Amid Panic After H-1B Visa Fee Hike, Jaishankar And Rubio Meet

Amid the heightened tensions between India and the US, External Affairs Minister S Jaishankar held a bilateral meeting with US Secretary of State Marco Rubio on the sidelines of the 80th session of the UN General Assembly.

The US Department of State in a statement said India is of "critical importance" to Washington. It added that the two countries will continue work together to promote a “free and open Indo-Pacific region, including through the Quad."

"We discussed key areas of our bilateral relationship, including trade, energy, pharmaceuticals, and critical minerals and more to generate prosperity for India and the United States," Rubio said on X.

Jaishankar said that the two have “agreed on the importance of sustained engagement to progress on priority areas. We will remain in touch."

The Ministry of External Affairs in a statement earlier said that the measure is likely to have humanitarian consequences by way of the disruption caused for families. “Government hopes that these disruptions can be addressed suitably by the US authorities,” it said.

Restrictions on Students Visas Even Before H-1B Visa Fee Hike

Simply, put the American dream may be a thing of the past, despite the White House issuing a series of clarifications.

The uncertainty over visas had begun even before the H-1B visa fee hike. In May, the US temporarily paused student visa interviews. Applications were subject to vetting of social media reviews. Indians comprised the biggest foreign students’ group in the US.

In 2023 Former US Ambassador to India Eric Garcetti said, “You did it, India!  Each and every Indian student in the United States and the families supporting their success deserve recognition for this achievement.  The decision to study abroad, and your choice of the United States, represents a valuable investment by you and your families.  You are bringing our countries closer together and leading us towards a bright future.”

According to the US State Department, Indian students in America contribute about US$ 7.7 billion annually to the country’s economy. 

Impact On Indian Students

More than 4,22,000 Indian students have been studying in the US.

However, reports suggest that Indian student arrivals in the US witnessed a sharp drop of 46 per cent in July 2025. The trend will only gain momentum, experts said.

The decision has come as a rude shock for Indians, especially the students including those graduating from the IIMs (Indian Institute of Management) and IITs (Indian Institute of Technology). Besides jobs, for many IIT students, the US has been the most sought-after choice to pursue further studies.

One example will resonate with almost everyone. Former Reserve Bank of India Governor Raghuram Rajan, an alumnus of IIT, after earning a degree in electrical engineering, went on to do a doctoral programme at Massachusetts Institute of Technology. Rajan is currently teaching at Booth School of Business at Chicago.

"The craze to study and puruse a career in US is waning. Many students are now opting for other destinations such as Australia and countries in Europe," a professional career councellor said.  

“US restrictions on H-1B Visa will hurt Indians more than Indian IT services companies,” Nilesh Shah, Managing Director, Kotak Mahindra AMC said.

The move will lead to a shortage of skilled manpower in key areas impacting American life.

Soumya Kanti Ghosh, chief economic adviser, State Bank of India and member, Economic Advisory Council to the Prime Minister, in an article published by thesecretariat.in, said that the move needs to be seen in continuation of the already imposed tariffs on goods. “The present measure takes the trade wars to services impacting the IT sector that is exposed to the US.”

Notably, the move comes soon after the US Senate decided to introduce the Halting International Relocation of Employment (HIRE) bill, with an aim to impose a 25 per cent tax on selected payments, directed to foreign companies for their services in America.

Reverse Brain-Drain Phenomenon?

Even before the US decision on H-1B visas, global uncertainties had led to several Indians rejecting US postings. Reports have also shown a growing trend of non-resident Indians returning to India.

“This (H-1B visa decision) will require companies to reimagine the balance between offshore and onshore resources,” Siddhartha Nigam, Partner, Global Markets and US Corridor Leader, Grant Thornton Bharat said, adding that the proposed visa fee will have a transformative impact on the Indian tech talent landscape.

Nigam added that the US decision presents an opportunity to harness the talent base in India. “The move may encourage senior professionals to relocate to offshore locations, including India—potentially signalling a reverse brain drain,” he said.

Modi’s Appeal To Buy Local

Prime Minister Narendra Modi, who cancelled his US trip, on Sunday in a televised address urged citizens to buy local goods as he raised the pitch for “swadeshi.” The US tariff on India at over 50 per cent is one of the highest. At a time when trade talks between the two have also slowed down, Modi underlined that the drastic reduction in the goods and services tax (GST) rates will boost consumption. The reduction in GST, along with raising the income tax exemption limit, will lead to a saving of Rs. 2.5 lakh crore for Indians, the Prime Minister said.