Is Trump now targeting India's soft exports with H-1B, student visa crackdown?

It's not just the 50% tariff that the US has imposed on India – the Trump administration has taken an aggressive stance on American work visas, student visas, and Green Cards that might hit Indian IT services (ITES) companies. The Trump administration on Wednesday (US time) proposed new rules to restrict the duration of visas for international students, cultural exchange visitors, and foreign journalists, a move designed to tighten oversight and reduce misuse. At the same time, US Commerce Secretary Howard Lutnick and Florida Governor Ron DeSantis called the H-1B visa programme a "scam".

Indians account for nearly 75% of all H-1B visas granted by the US, driven by the country's vast talent pool that meets America's demand for software engineers, data scientists, and IT consultants.

Each year, India produces millions of engineering and computer science graduates who become ready talent for ITES firms. Companies such as Infosys, TCS, Wipro, Cognizant, and HCL are among the top sponsors of H-1B visas.

India's greatest export to America is not goods, but the people – its engineers, coders, and students – who sustain both Silicon Valley and the ITES boom in the US.

By targeting H-1Bs, student visas, and Green Cards, the administration is seemingly hitting India's soft power.

While some argue the crackdown could push India to retain more talent at home, it also undermines the country's biggest strength in the US.

Calling the H-1B visa programme "terrible", Lutnick said it, along with the Green Card system, would be overhauled to ensure the US attracts top talent.

"The average American makes $75,000 a year, and the average Green Card recipient $66,000. So we (Americans) are taking the bottom quartile. Why are we doing that? That's why Donald Trump is going to change it. That's the Gold Card that's coming. And that's why we're going to start picking the best people. It's time for that to change," Lutnick added in an interview with Fox News.

The proposed Gold Card would grant permanent residency to foreigners investing $5 million in the US.

According to Lutnick, the programme has drawn strong interest, with around 2,50,000 applicants reportedly in line, which could generate $1.25 trillion in revenue.

WHAT ARE FOREVER STUDENTS IN THE US?

Meanwhile, student and exchange visa holders have also come under the Trump administration's radar in what is being seen as a broader aggressive stance on immigration that could impact India.

Students (F visa) and exchange visa holders (J visa) have been admitted under a "duration of status" system since 1978, letting them stay as long as their enrolment continues, without fresh vetting.

The Trump administration has argued that this has created "forever students". The new rules cap student and exchange visas at four years, and limit foreign journalist (I) visas to 240 days, with options for extensions.

Many Indian students pursue master's and PhDs in the US, and transition to the H-1B visa system through the OPT programme. The Trump administration is trying to narrow down that pathway too.

The crackdown on the H-1B visa programme is also aimed at placating the MAGA crowd, which brought Trump to the White House.

Florida Governor Ron DeSantis also called the H-1B programme a "total scam", accusing companies of abusing the system by laying off Americans while hiring new H-1B workers, mostly from India.

He argued this hurts young Americans already struggling in the job market due to AI disruptions, questioning why the US should import foreign workers when it has its own workforce to support.

During his campaign, Trump promised the MAGA crowd that he would curb immigration to the US and initiate the largest deportation programme in US history.

FROM RESTRICTIONS TO SUPPORT TO CURBS: TRUMP ON H-1B

In January 2025, Trump had said he would support the H-1B visa programme.

"I like both sides of the argument (for and against H-1B), but I also like very competent people coming into our country, even if that involves them training and helping other people that may not have the qualifications they do. But I don't want to stop, and I'm not just talking about engineers, I'm talking about people at all levels," Trump said.

He further argued that allowing "quality people" to come into the US further helps in bolstering the economy by supporting various industries.

"We want competent people coming into our country. And H-1B, I know the programme very well. I use the programme...," Trump had said.

He further added, "By doing that, we're expanding businesses and that takes care of everybody. So I'm sort of on both sides of the argument, but what I really do feel is that we have to let really competent people, great people, come into our country. And we do that through the H-1B programme," Trump said.

However, the US President's position on the issue has shifted as often as his mood – in line with his unpredictability on just about everything.

During Trump's first term, his administration imposed restrictions on H-1B visas, citing concerns over "abuse" and "economic strain". Trump had then condemned the programme as a tool for companies to replace American workers with lower-paid foreign employees – a stance his administration is now reaffirming.

With tariffs, tighter visa rules, and rhetoric branding the H-1B visa as a "scam", the Trump administration is signalling a tougher line that could reshape the future of India's IT sector and students in America.

The unpredictability of Trump's stance will likely make planning for talent and trade uncertain in his second term in the White House.

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