As US President Donald Trump on Friday signed and executive order to impose a $100,000 fee on H-1B visa applications, the industry leaders and US lawmakers criticised the move as ‘reckless’ and noted that it will have a ‘huge negative’ on the IT industry.

What did Trump say?

Trump on Friday signed the proclamation ‘Restriction on entry of certain nonimmigrant workers’ that restricts the entry into the US of those workers whose H1B petitions are not accompanied or supplemented by a payment of USD 100,000.

“The H-1B nonimmigrant visa programme was created to bring temporary workers into the United States to perform additive, high-skilled functions, but it has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labour,” Trump said in the proclamation.

“The abuse of the H-1B programme is also a national security threat. Domestic law enforcement agencies have identified and investigated H-1B-reliant outsourcing companies for engaging in visa fraud, conspiracy to launder money… and other illicit activities to encourage foreign workers to come to the United States,” he said in the proclamation.

‘Will impact IT sector negetively…’

Congressman Raja Krishnamoorthi told PTI, the fee hike is a “reckless attempt to cut America off from high-skilled workers who have long strengthened our workforce, fuelled innovation, and helped build industries that employ millions of Americans.”

Pointing out that many H-1B holders become citizens and later launch businesses to create more jobs, he adds, “While other nations race to attract global talent, the United States should strengthen its workforce and modernise our immigration system—not erect barriers that weaken our economy and security.”

Ajay Bhutoria, former advisor to president Joe Biden, said that the fee hike will have a negetive impact on the tech sector.

“The H-1B programme, a lifeline for innovation that has attracted top talent from around the world, faces unprecedented barriers with this massive jump from the current $2,000-$5000 total fee, which will crush small businesses and startups reliant on diverse talent,” Bhutoria told PTI.

Additionally, Khanderao Kand of the Foundation for India and Indian Diaspora Studies (FIIDS) termed the decision as an “unfortunate” one that can have a “very negative” impact on the US tech industry.

“The 100k fee for H1Bs is a very unfortunate policy with a huge negative impact on business, particularly the software/tech industry, as well as US-educated STEM talent who are already struggling due to the negative impact of AI and tariffs. We need to educate about talent shortages and their negative impact, especially on startups and smaller tech companies, making it difficult for them to innovate and compete,” he said, as reported by ANI.

How companies are reacting?

Meanwhile, companies like Microsoft and JP Morgan have already issued directive for their employees. Microsoft has asked H-1B and H-4 visa holders, who are outside the United States currently, asked the them return to the country before September 21 deadline. JP Morgan, on the other hand, asked the H-1B visa holder to avoid international travel until further guidance.

Many large US tech, banking and consulting companies declined to comment or did not immediately respond to requests for comment.

Shares of Cognizant Technology Solutions, an IT services company that relies extensively on H-1B visa holders, closed down nearly 5%. U.S.-listed shares of Indian tech firms Infosys and Wipro closed between 2% and 5% lower.