US Unveils Sweeping Changes to H-1B Visa Programme, Impacting Indian Workers and Students

The United States government has announced a series of proposed changes to its immigration rules, including the H-1B work visa programme, Optional Practical Training (OPT) system, and employment-based Green Cards. These recommendations, issued jointly by the Departments of Homeland Security (DHS), Labor, and State, are part of the Unified Regulatory Agendas and are expected to take effect in August 2025.

Among the most significant changes is a reduction in the exemptions granted to universities and research organisations from the annual H-1B visa cap of 85,000. Currently, institutions such as universities are not subject to this cap, but the new rules would limit these exemptions, potentially reducing the number of visas available for skilled workers.

The DHS also plans to impose stricter requirements on employers who place H-1B workers at third-party client sites—a model widely used by Indian IT firms. Companies must now demonstrate a genuine employer-employee relationship and provide evidence that the worker will perform specialised tasks at the client site. Detailed documentation will be required, and past violators of H-1B rules will face enhanced scrutiny. Additionally, some supplemental fees accompanying H-1B applications will be extended and expanded.

The Department of Labor's proposed rule changes focus on wage levels. The entry-level wage benchmark for H-1B and the Program Electronic Review Management (PERM) system—the first step for employment-based Green Cards—would increase from the 17th to the 34th percentile. Higher wage levels will also be raised, making it more expensive for employers to sponsor foreign workers and pursue Green Cards.

International students will also be affected. The DHS currently allows students to stay in the US based on the 'duration of stay' principle, meaning they can remain as long as they meet programme requirements. Under the new rules, students will receive fixed periods of stay and must apply for extensions to continue studying or remain in the country. This change is particularly significant for India, which sent approximately 330,000 students to the US in the 2023-24 academic year—the largest share of any country. Furthermore, US consular officials report that Telangana and Andhra Pradesh account for 50% of Indian students in the US.

Another proposal, effective February 2027, would tighten rules around the OPT system, including changes to the two-year STEM OPT extension and Curricular Practical Training (CPT). These are popular pathways for Indian students to gain US work experience after graduation.

Finally, the H-4 visa programme for spouses of H-1B workers may face increased paperwork and restrictions. Currently, H-4 holders can work in the US, but new rules could alter that.

These proposed changes have major implications for India and Indians, who constitute about 71-74% of approved H-1B applications annually. The rules are not yet finalised but are expected to be implemented in stages starting August 2025.