• Trump's H-1B visa fees rise to $100,000, prompting US firms to consider relocating work to India.
• India hosts over 1,700 global capability centers (GCCs), becoming a hub for high-value innovation.
• Industry experts predict an 'extreme offshoring' trend as firms adapt to labor market changes.

U.S. firms are increasingly considering shifting their operations to India following President Donald Trump's significant raise in H-1B visa application fees to $100,000. This change is seen as a catalyst for many companies to establish global capability centers (GCCs) in India, which already hosts over 1,700 of these centers—more than half of the global total. As GCCs evolve beyond their traditional tech support roles, they now focus on high-value innovation in sectors such as finance and research and development, according to Reuters and South China Morning Post.

The sharp increase in H-1B visa fees is pressuring employers who depend on skilled foreign labor, with many exploring alternatives to offshoring jobs. Rohan Lobo, a partner at Deloitte India, emphasized that GCCs are “uniquely positioned for this moment” where U.S. firms are reassessing labor strategies amidst tightening visa regulations. He noted that plans for relocating high-value tasks are already in motion, particularly among companies tied to federal contracts, as echoed by both Reuters and India Times.

Industry insiders predict that many firms will resort to “extreme offshoring,” similar to practices observed during the COVID-19 pandemic, which demonstrated that complex tech functions could be effectively managed remotely. Major corporations such as Amazon, Microsoft, and JPMorgan Chase are among the largest sponsors of H-1B visas, maintaining substantial operations in India but refraining from public commentary on this politically sensitive situation, as reported by Reuters and South China Morning Post.

As a consequence of these adjustments, India's GCC landscape is projected to host over 2,200 centers by 2030, potentially reaching a market size of nearly $100 billion. Lalit Ahuja, CEO of ANSR, remarked on the urgency for U.S. companies to adapt, reinforcing that Trump's policy changes could inadvertently fuel India's growing centralized role in corporate innovation, a sentiment supported by India Times and South China Morning Post.

While the surge in services demand through GCCs could cushion the blow to India's $283 billion IT sector, there are concerns about future 25% taxes on outsourcing imposed by the proposed HIRE Act, which could complicate this transitional dynamic. Analysts suggest that the potential losses from reduced H-1B operations may be offset by outsourcing talent through GCCs, as noted by Reuters and South China Morning Post.