H-1B Visa Fee Row: India’s Diplomacy Under Strain

H-1B Visa Fee Row: India’s Diplomacy Under Strain

The U.S. H-1B visa fee hike exposes India’s foreign policy challenges. This blog analyses India’s diplomatic failures and successes with the U.S., Saudi Arabia, Pakistan, China, and Russia, while highlighting future reforms—multilateral bargaining, diaspora diplomacy, trade-migration linkages, and domestic skilling. Relevant for UPSC GS-II & GS-III.

Introduction

Diplomacy is not measured merely in summits, handshakes, or headline-making speeches. Its true test lies in whether a nation can secure tangible outcomes for its citizens and industries. India’s long-cherished idea of strategic autonomy—to remain independent while engaging widely—has recently come under strain. The most recent example is the U.S. decision to impose steep H-1B visa fees, a move that directly affects lakhs of Indian professionals and raises uncomfortable questions about the effectiveness of India’s foreign policy.

This blog evaluates how India has fared in navigating global headwinds, highlighting both failures and successes of diplomacy, and what reforms are needed to secure long-term interests. For UPSC aspirants, this discussion is relevant to GS Paper II (International Relations, Governance, and Polity) and GS Paper III (Economy and Technology).

What Does the H-1B Visa Episode Imply?

The H-1B episode underscores a dual reality for Indian foreign policy:

1. Rising Visibility: India is increasingly acknowledged as a major power, invited to lead or co-lead global forums like the G20 and the Quad.

2. Persistent Vulnerabilities: Despite this status, India has struggled to shield its core labour and economic interests, especially in negotiations with advanced economies.

Effective diplomacy must therefore move beyond optics and high-level summits to focus on trade, technology, and people-centric strategies that directly impact citizens.

Failures of Indian Foreign Policy

United States

• H-1B Visa Fee Hike: The imposition of a USD 100,000 annual sponsorship fee disproportionately hits Indian professionals, who form nearly 70–80% of H-1B recipients.

• Higher Tariffs and Stalled FTA: U.S. tariffs on Indian goods and a stalled Free Trade Agreement since 2018 show limited progress in economic negotiations.

• Secondary Sanctions: American sanctions on Iran disrupted India’s Chabahar Port operations, jeopardising its connectivity plans to Afghanistan and Central Asia.

Saudi Arabia

• Riyadh has strengthened defense and nuclear cooperation with Pakistan, complicating India’s regional security and strategic leverage in West Asia.

Pakistan

• The Pahalgam terror attack intensified hostilities, reminding India of the persistent threat from cross-border terrorism.

China

• During Operation Sindoor, Beijing openly backed Pakistan, supplying drones, arms, and munitions.

• Border crises and trade imbalances continue to expose India’s vulnerabilities vis-à-vis China.

Russia

• India’s balancing act in the Ukraine conflict has left Moscow ambiguous in its support.

• Russia’s growing closeness to China further weakens India’s traditional reliance on the Russia-India partnership.

Taken together, these setbacks show that India is often reacting to global events rather than shaping them.

Successes of Indian Foreign Policy

United States and Quad

• Despite disputes, U.S. Secretary of State Marco Rubio (2025) reaffirmed India’s centrality in the Quad, aimed at balancing China in the Indo-Pacific.

Global Role and Soft Power

• G20 Presidency 2023: India successfully hosted and set the agenda on digital economy, climate action, and Global South concerns.

• BRICS Expansion: India secured a voice in shaping multipolarity.

• Quad Leadership: Actively shaping Indo-Pacific security dialogues.

Economic Partnerships

• Free Trade Agreements (FTAs) signed with the UK, UAE, and Australia have boosted trade diversification.

• Supply-chain resilience agreements with Japan and the EU reduce dependence on China.

• Energy diversification post-Ukraine war, including renewables and Middle East oil partnerships, strengthens India’s energy security.

• Japan pledged 10 trillion yen investment over the next decade, signaling strong economic confidence.

Diaspora Diplomacy

• India’s 34 million-strong diaspora is a unique strength. Mobilised effectively, it provides lobbying power in host countries, especially the U.S., UK, and Canada.

Thus, India’s diplomacy has not been devoid of achievements; the challenge lies in converting visibility into leverage.

Why India’s Diplomacy Feels Reactive

• Over-reliance on major powers: Too dependent on the U.S. for migration and technology, on Russia for arms, and on China for trade inputs.

• Personal Diplomacy > Institutional Diplomacy: Heavy reliance on high-profile summits rather than long-term institutionalised bargaining weakens continuity.

• Trade-Service Disconnect: While services (especially IT) are India’s strength, trade negotiations rarely integrate labour mobility provisions.

• Limited Multilateral Bargaining: India often engages bilaterally, missing opportunities in multilateral forums like the WTO, ILO, or GATS (Mode 4 services).

What Needs to Be Done?

1. Strengthen Multilateral Bargaining

• Use forums like the EU, WTO, ILO, and BRICS to push labour mobility and digital trade agendas.

• Negotiate migration-related provisions in FTAs, similar to the India-UK FTA discussions.

2. Diversify Markets and Reduce Overdependence

• As highlighted in the Economic Survey 2022–23, India must reduce its reliance on the U.S. for IT and pharma exports.

• Expanding into Africa, ASEAN, and Latin America can shield India from shocks like H-1B fee hikes.

3. Institutionalise Diaspora Diplomacy

• Create a coordinated lobbying framework, modeled after Israel’s or Ireland’s diaspora engagement strategies, to amplify Indian interests in Washington, Brussels, and other capitals.

4. Link Trade with Migration

• Mode 4 (GATS), which covers movement of natural persons, should be made a standard demand in trade negotiations.

• Trade deals must secure not just goods access but also visa and work mobility provisions.

5. Ensure Strategic Consistency

• Reduce ad-hocism by building stronger institutional foreign policy mechanisms.

• Align ministries (MEA, Commerce, Labour) to ensure coherence in negotiations.

6. Invest in Domestic Skilling and Opportunities

• Reduce vulnerability abroad by generating high-end jobs at home.

• Strengthen Skill India, Digital India, and semiconductor missions to retain talent domestically.

Conclusion

India’s foreign policy today is a study in contrasts. On the one hand, it commands global respect and visibility through leadership in forums like the G20, Quad, and BRICS. On the other, it suffers from weaknesses in protecting core national interests such as labour mobility, technology access, and trade stability.

The H-1B visa fee row exemplifies this paradox: while India aspires to global leadership, its citizens’ opportunities abroad remain vulnerable to foreign domestic politics.

The way forward lies in rebalancing diplomacy:

• From optics to outcomes.

• From personal to institutional diplomacy.

• From dependence on a few powers to diversified partnerships.

• From reactive responses to proactive agenda-setting.

If India succeeds in these reforms, it can transform from a visible global player into a truly influential one, securing both prestige abroad and prosperity at home.

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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH