H-1B and tariffs

Donald Trump’s return to the White House has reignited concerns for US-India relations, with economic policies and immigration reforms taking centre stage. While shared strategic interests like countering China remain strong, India must brace for potential strains over trade tariffs and the H-1B visa programme. The H-1B visa, critical for Indian tech professionals, faces heightened scrutiny under Trump’s “America First” policies. During his earlier term, rejection rates soared as regulations tightened. In 2024, H-1B approvals fell, with Infosys and TCS reporting declines of 1,400 and 1,600 clearances, respectively. Compounding these challenges, proposed legislative amendments seek to double application fees and raise minimum wage requirements, potentially making the visa less accessible for Indian talent. Despite a decline in reliance on H-1B visas — 80 per cent of HCLTech’s US workforce now comprises locals — the uncertainty surrounding the programme could disrupt India’s $128-billion IT industry.

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On the trade front, Trump’s stance on tariffs poses another challenge. His earlier revocation of India’s Generalised System of Preferences (GSP) and branding of India as a “tariff king” underscore ongoing tensions. As India’s largest trading partner, the US accounted for $191 billion in bilateral trade in 2024. Made-in-India generic medicines constituted nearly half of all US prescription drugs in 2022, amounting to approximately $8.7 billion in exports. However, Trump’s threats of reciprocal tariffs on Indian goods, including pharmaceuticals and textiles, risk destabilising this relationship.

Despite these obstacles, opportunities exist. India’s growing role in the US’s “China-plus-one” strategy could bolster trade ties. Moreover, Elon Musk’s advocacy for H-1B reforms offers a glimmer of hope for skilled workers. As External Affairs Minister S Jaishankar engages Washington, balancing trade reforms, visa policies and strategic collaboration will be crucial. Proactive diplomacy can ensure that trade and talent remain the pillars of a robust US-India partnership.