Indian institutes may see less US offers, new bill targets H-1B exemptions for academia

Sweeping changes to the H-1B visa programme, announced recently by US President Donald Trump, have created uncertainty among Indian students, especially those nearing graduation and preparing for international placements. For many, the announcement has cast doubt over long-held aspirations of working in the United States.

According to a report by Indian Express, the impact of these changes is already evident. The US Citizenship and Immigration Services reported a 26.9% drop in eligible H-1B visa registrations for FY 2025–26, falling to 343,981 from 470,342 the previous year. The reduction signals a broader shift in hiring patterns, with fewer US-bound opportunities and a possible long-term decline in international placements, particularly affecting students from tier-2 and tier-3 institutions.

Domestic hiring gains ground as global options narrow

Institutes such as the Indian Institutes of Technology (IITs) and Birla Institute of Technology and Science (BITS) Pilani report that international offers have historically made up only 5–10% of placements. Ramgopal Rao, Group Vice Chancellor of BITS Pilani and former Director of IIT Delhi, noted that the latest changes may have “more cascading than immediate” effects. According to him, with more H-1B holders returning and fewer students going abroad, the long-term impact on India’s economy and IT sector could be complex, as reported by IE.

However, he also pointed to a potential upside. Outsourcing to India may increase as companies adjust to visa constraints. This would create more opportunities locally, particularly in the tech sector.

V Kamakoti, Director of IIT Madras, echoed this view. He said many multinational companies already have operations in India and are shifting hiring locally to avoid the high cost of international placements. “Instead of spending a crore of rupees on an H-1B visa, they prefer hiring Indian talent to work locally. This shift will, in turn, strengthen the Indian ecosystem,” he told IE.

Limited placement data supports these observations. While top tech firms like Google and Microsoft have continued to recruit from premier Indian institutions, international offers remain a small share of overall placements. Common destinations include the US, UK, Japan, Netherlands, Singapore, and the UAE.

Visa Cap Enforcement Act: proposed legislation could tighten academic mobility

In a related development, Senator Tom Cotton introduced the Visa Cap Enforcement Act in the United States, a bill aimed at ending long-standing exemptions that allow universities, non-profits, and research institutions to hire foreign nationals outside the annual H-1B quota of 85,000.

According to Business Standard, the bill proposes:

• Removal of exemptions for universities, non-profits, and research institutions
  
  
• Elimination of provisions that ease transitions into H-1B status
  
  
• A requirement for new petitions after a change of employer to be counted again under the annual cap
  
  

If enacted, the changes would subject academic and research institutions to the same visa limits as private companies, potentially affecting their ability to recruit international faculty, researchers, and scholars.

“Colleges and universities shouldn’t get special treatment for bringing in woke and anti-American professors from around the world,” Cotton, a Republican from Arkansas, said. “My bill closes these loopholes that universities have abused for far too long,”as reported by by Business Standard.

The proposal could further restrict international hiring pathways, impacting Indian academics who seek teaching and research roles in the US and adding to the challenges faced by Indian students in a shifting visa environment.

Self-funded students face higher exposure to risk

The visa changes are likely to impact Indian students in the US without fellowships or financial aid more significantly. Kamakoti noted that this group often invests large sums — sometimes running into crores — expecting to recover costs through employment after graduation. Under the new visa regime, those expectations may not hold.

IIM Indore Director Himanshu Rai said the scenario has changed considerably since the early 2000s. “The US dream is no longer the main consideration for IIM students,” he told IE. According to him, opportunities still exist for students with strong degrees and relevant experience, often through L1 visas. However, he added that students from non-premier institutions may find it increasingly difficult to access international roles.

Skills and specialisation become key differentiators

Neeti Sharma, CEO of TeamLease Digital, said the tightening of visa rules will make job-ready, specialised skills even more critical for graduates. “This sharp decline [in H-1B numbers] shows US-bound offers were already slowing. This trend will continue as companies focus more on India-based work, near-shore teams, and local hires abroad,” she told IE.

Sharma added that companies are likely to reserve visa sponsorships for mid-level or highly specialised roles. “For campus hires, this means fewer US offers and more India or near-shore roles. Those with niche, job-ready skills will hold an edge over general profiles,” she explained.

She also warned that a return of students graduating from US institutions could put additional pressure on India’s mid-level workforce. “US revenues for IT firms may slow—large players will withstand this better than mid-tier ones. Sluggish placements could affect exports and remittances, but the rising demand for niche skills in India will also create new opportunities at home,” she said.

India's innovation ecosystem may see a boost

Kamakoti pointed to a growing startup ecosystem as a bright spot. He said Indian startups are giving young graduates early exposure to deep-tech and emerging technologies. At IIT Madras alone, more than 100 deep-tech startups were incubated in a single year, underscoring the growing strength of domestic innovation.

He believes the shift in US visa policy could redirect student interest toward Europe and Asia while simultaneously strengthening India’s innovation capacity. “Indian talent remains crucial, and companies are expected to expand their operations here,” he said.

Rai added that broader technological disruptions such as AI are already redefining the global job market. While skilled roles remain in demand, routine work such as repetitive coding is increasingly being automated. He noted that IIM finance graduates are already looking toward regions like the UK, Singapore, Hong Kong, and emerging African and Asian hubs.

Students advised to adapt and broaden career outlook

With evolving global dynamics, experts advise students to remain flexible and proactive in upskilling. Rai encouraged students to align their goals with their skills and interests rather than focusing solely on international placements. “Rather than relying on lofty ideas like creating jobs, they should embrace the spirit of experimentation, follow their passion, and chart a career path that aligns with their strengths,” he said.

Sharma also emphasised the importance of demonstrable skills. “What matters most is proof of ability through projects, internships, or open-source work,” she said. She recommended that students adopt an India-first approach while maintaining a global outlook. “Alongside aiming for the US, explore Canada, Europe, and other markets,” she added.