President Donald Trump’s decision to raise H-1B visa application fees to $100,000 has caused concern among Indian workers in the U.S. and tech companies. H-1B visas, which allow American firms to hire skilled foreign workers, are held by approximately 71% Indians and 11.7% Chinese.

This move further strains already tense U.S.-India relations, following the U.S. imposition of additional tariffs on Indian exports due to New Delhi’s continued purchases of Russian oil. In India, shares of IT companies fell following the announcement of the new visa fees.

Analysts warn that the fee hike could significantly increase operating costs for IT firms and their clients in the U.S., affecting profit margins. Companies may explore alternatives, such as relocating operations to countries like Mexico or Canada, replacing H-1B visa holders with U.S. residents or citizens, or expanding operations in India’s emerging tech hubs.

Some companies, like Mphasis, stated they have steadily reduced their reliance on H-1B visas and currently have sufficient staff to meet client demands. Toshi Jain of JPMorgan predicts that fewer H-1B visa holders will reduce remittances to India and likely decrease the number of Indian students choosing to study in the U.S., as the high visa fee could act as a “tax” on seeking employment after graduation.