Quick Take
- Trump administration imposed $100,000 fee on new H-1B visa petitions in February 2025
- Indian AI startups pivoting to remote work and domestic hiring strategies
- Companies exploring L1 and O1 visa alternatives to maintain US operations
- Shift expected to boost talent retention in Bengaluru and Hyderabad tech hubs
Indian technology companies are making fundamental changes to their US expansion plans after the Trump administration rolled out a $100,000 fee on H-1B visa applications, with artificial intelligence startups leading the charge toward remote work and India-based hiring. Research from Economic Times shows the policy change has pushed companies to drop traditional talent acquisition models that depended heavily on bringing Indian engineers to American offices.
Startups Drop Traditional H-1B Strategy
Sentient AI, which runs a decentralized artificial intelligence platform with US research facilities, has completely dropped H-1B visa sponsorship from its hiring approach. This reflects what many in the industry are saying – that the $100,000 fee creates an impossible financial hurdle for cash-strapped early-stage companies.
“Startups simply cannot absorb such a hefty fee,” said Gnanamookan Senthurjothi of The Visa Code, pointing to the harsh reality facing founders who used to see H-1B visas as crucial for accessing American talent markets. The fee eats up a major chunk of typical startup funding rounds, forcing companies to move money from product development to immigration costs.
Remote Work Becomes the Main Alternative
Atal Agarwal, founder of OpenSphere and LegalBridge, expects a major shift in how Indian companies enter American markets. “Remote work might become more prominent,” Agarwal noted, as companies look to keep access to US markets without the crushing visa sponsorship costs.
This change goes beyond just saving money. Companies are finding that remote work models give them access to global talent while keeping operational flexibility. Startups can serve American clients while keeping their core development teams in India, where operating costs stay much lower.
Alternative Visa Routes Gain Steam
Industry experts see more companies turning to L1 intracompany transfer visas and O1 visas for individuals with extraordinary abilities. These offer workable paths for companies that want to keep a physical presence in American markets, even though they have different qualification requirements.
Mayank Pratap of Supersourcing notes that while startups focus on cutting costs, “remote work and global talent distribution have seen increased commitments.” This suggests companies see geographic spread as a strategic plus rather than just a temporary fix.
Regional Tech Hubs Win from Policy Change
The visa fee rollout is speeding up talent retention in Indian technology centers. Bengaluru and Hyderabad, major AI hubs, are seeing increased investment as companies redirect resources from American operations to domestic expansion.
Sandeep Kohli, cofounder of Divyam.ai, thinks the disruption might strengthen India’s position in global tech markets. “The focus on skill and willingness to adapt might eventually work in favor of startups returning focus to India,” Kohli explained, showing how forced localization could drive domestic innovation.
Sales Operations Stay US-Focused
Despite moving development teams, companies keep their American sales and client relations going. This lets startups hold onto access to US venture capital and enterprise clients while cutting development costs through geographic arbitrage.
Jeffrey Wang of Exa AI Labs sees benefits in this forced diversification, noting chances to “tap non-American talent” that might have been missed with easier H-1B access for Indian engineers in the US.
Long-term Strategic Impact
The $100,000 H-1B fee signals a major restructuring of how Indian tech firms approach international expansion. Companies are building more resilient operational models that reduce dependence on specific immigration policies while keeping global market access.
This shift could speed up India’s domestic AI ecosystem development as investment focuses locally rather than on US expansion. The policy change may accidentally strengthen India’s role as a global tech hub by encouraging domestic innovation and talent retention.
As startups adapt to regulatory changes, new operational models put flexibility and cost efficiency ahead of traditional geographic concentration strategies.
