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A new wave of protectionist measures from Washington is reshaping the India–U.S. technology relationship. Under a proposal from President Donald J. Trump’s administration, companies could soon be required to pay as much as $100,000 for each H-1B visa application. The impact would fall heavily on Indian professionals, who account for more than 71 percent of all H-1B holders.
The move comes alongside a 25 percent tariff imposed on certain Indian goods, a double blow to India’s export and services economy.
Crisis as Opportunity
Yet analysts say this crisis is also creating unexpected opportunities. Chief among them is the rapid rise of Global Capability Centers (GCCs) in India. Once, multinational corporations relied on outsourcing giants like Infosys, TCS and Wipro to handle technology projects. Increasingly, they are setting up their own captive centers in India, gaining direct control over costs, quality and innovation.
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A Shift to Insourcing
Observers describe the trend as a new wave of “insourcing.” Where an American bank might once have contracted an Indian IT firm for a technology upgrade, it can now open a GCC in Bengaluru or Hyderabad and hire its own engineers. The shift not only reduces costs by 70 to 75 percent, experts say, but also improves transparency and long-term efficiency.
From Back Office to Innovation Hub
India’s GCCs are no longer confined to routine back-office support. Companies like Google, Microsoft, Amazon, J.P. Morgan and Goldman Sachs are turning these centers into engines of innovation, driving work in artificial intelligence, cloud engineering and cybersecurity.
Rapid Expansion
Today, India hosts nearly 1,600 GCCs employing more than 1.7 million people. According to estimates from McKinsey and ANSR, the number of such centers could grow by 60 percent over the next two to three years.
A Challenge for U.S. Firms Too
The restrictions may hurt American companies as well. Data from Pew Research show that more than half of all H-1B visas are issued for computer and technology jobs — the very roles on which Silicon Valley giants like Amazon, Apple and Google depend.
Expert Views
Sajjid Chinoy, chief India economist at J.P. Morgan, said the measures would deliver an initial shock but could prove advantageous for India in the medium term. Sam Conrad of Jupiter Asset Management called the trend “one of the most compelling opportunities globally for India,” while Anand Gupta of Allianz Global Investors argued that corporate earnings in India are now on track for a rebound.
