Silicon Valley's Indian dream: The fight over US's most controversial visa, the H1B

Racist rhetorics or blind support aside, 1990-era visa programme needs an urgent overhaul

By Deedy Das

Published: Jan 7, 2025 05:00:33 PM IST

Updated: Jan 7, 2025 05:59:27 PM IST

The H1B work visa debate has drawn in figures like Donald Trump, Elon Musk, Vivek Ramaswamy, and Bernie Sanders, capturing the attention of over 200 million people online and affecting 1.7 billion people across the US and India. Image: Shutterstock

A visa programme intended to attract top talent to the United States has become a lightning rod for controversy and an unexpected battleground in America's culture wars, with racial tensions against Indians at its core. The H1B work visa debate has drawn in figures like Donald Trump, Elon Musk, Vivek Ramaswamy, and Bernie Sanders, capturing the attention of over 200 million people online and affecting 1.7 billion people across the US and India.

The controversy ignited when Sriram Krishnan's nomination as Trump's senior White House policy advisor on AI sparked outrage among the far-Right Republican faction. An old tweet about removing “country caps” and snippets from a podcast I did with Krishnan were misinterpreted as advocating for unlimited Indian immigration, while the elevation of Indian-Americans like Vivek Ramaswamy and Kash Patel to key government positions led some to question Trump's allegiance to the white Right.

The H1B programme, restructured in 1990, allows employers to sponsor foreign workers for “specialty occupations” through an annual lottery system allocating 85,000 spots (65,000 general + 20,000 for advanced degrees). The process costs employers $12,000-15,000 per application, with about 14-17 percent success rate given the 470,000 applications in 2024. The visa is valid for three years, extensible to six years, during which most pursue green cards through EB-2 or EB-3 categories. Indians dominate the programme, receiving about 60 percent of new H1Bs and 80 percent of renewals. Due to the country cap limiting green cards to 7 percent per nation, over 1 million Indians and their families are stuck in a 130-150 year backlog, forcing them to continuously extend their H1Bs. The tech industry absorbs roughly 70 percent of H1B workers, with 50-70 percent of Silicon Valley being foreign-born.

Proponents highlight impressive statistics: Indian-Americans comprise 1.5 percent of the US population but pay 6 percent of taxes, 44 percent of billion-dollar startup founders are foreign-born, and Indian CEOs lead major corporations like Google, Microsoft, and Adobe. Success stories span beyond tech giants—Indian entrepreneurs own roughly 50 percent of economy hotels in the US, and Indian-Americans hold the highest median household income at $145,000 among all ethnic groups. The median H1B salary of $123,000 is far higher than American median wage, countering the “cheap labour” argument. America's shortage of tech graduates (160,000/year, only 64,000 being white) supports the need for foreign talent. With five Nobel laureates of Indian origin and about 10 percent of US physicians being Indian, advocates argue this demonstrates the programme's ability to attract exceptional talent across multiple fields.

Critics raise valid concerns even beyond racist rhetoric. They question why companies continue hiring H1B workers while laying off 100,000+ tech workers. IT staffing firms like Wipro, Infosys, and TCS, accounting for about 50 percent of H1Bs, face accusations of fraud and wage manipulation. A 2017 NBER study suggested US computer scientists would have earned 2.6-5.1 percent more without the H1B programme. These concerns extend beyond IT staffing firms—Meta is now facing a lawsuit alleging it discriminates against US workers. UC Davis CS Professor Norm Matloff argues in a 2025 essay that there’s no tech shortage at all, claiming even top companies use H1B as cheap labour and that “there are no good H1Bs”.

Also read: How the Trump administration stance on H1B will play out for India

The education system reflects these issues: MS engineering programmes in the US used to have one-third foreign-born students in the mid-90s to 72 percent today, with universities using these programmes as "cash cows" for H1B sponsorship. The cultural dimension adds another layer—while the far-Right claims Indian immigrants won’t assimilate, Vivek's incendiary tweet suggests American culture itself isn't conducive to producing STEM graduates. Indeed, America's education system ranks 33rd globally in math literacy and the government acknowledges a dearth of local STEM workers.

The solution likely lies in overhauling the 1990-era programme. Key recommendations include:

Implementing a merit-based point system considering academic excellence, university quality, salary levels, English proficiency, and cultural alignment.
Increasing H1B fees to $25,000-35,000 to ensure companies truly need exceptional talent
Addressing the 1 million+ Indian green card backlog to prevent "indentured servitude" from driving down wages
Strengthening fraud prevention in Labor Condition Applications by using a modern, open online registry (instead of newspapers)
Improving US public education in STEM fields for long-term competitiveness

The H1B saga represents more than just an immigration debate—it's a mirror reflecting America's complex relationship with global talent and its own workforce. While the programme has undeniably enriched America’s technology, it has also exposed fault lines in the nation's education system and labour market. The challenge isn't choosing between American workers and skilled immigrants, but rather crafting a system that allows both to thrive in an increasingly competitive global economy. The future of America's tech leadership may well depend on getting this balance right.

The author is an India-born US green card holder who now works at Menlo VC