On September 19, 2025, the Trump Administration shocked corporate America with a major hike in H-1B visa fees, soaring from $2,000-$5,000 to $100,000 for new petitions, starting September 21, 2025. Marketed as a move to “protect American jobs,” the decision has jolted industries reliant on international talent — especially tech, where Indians and Chinese account for nearly 70% and 12% of H-1B visa holders respectively. For American firms such as Amazon, Microsoft, and Meta, this isn’t merely a policy adjustment; it’s a profound change that endangers innovation, project schedules, and future expansion. Yet, amidst the disruption lies an opportunity – for U.S. companies to re-evaluate how they access India's extensive talent pool without overspending.
The H-1B Crunch: Why It Hurts
The numbers tell a stark story. In FY 2024, the U.S. Citizenship and Immigration Services approved over 280,000 H-1B visas for Indian workers – most employed in the tech sector. Data from the U.S. Census Bureau’s 2023 ACS shows 78% Indian immigrants aged 16 years and older were in the civilian labour force, powering critical sectors like management, business, science and arts. With the new $100,000 fee applicable for petitions filed on or after September 21, 2025 (sparing existing visa holders and pending applications), hiring these skilled workers just got exponentially costlier. Non-compliance could result in a hard stop on visa approvals altogether, leaving companies scrambling to fill critical roles.
The ripple effects are already being felt. JP Morgan’s economists estimate the fee hike could slash 5,500 H-1B visas per month, a gut punch to industries already battling talent shortages. Tech giants, long dependent on India’s deep talent pool of engineers and data scientists, face a stark reality: pay up or pivot. For companies driving cutting-edge AI, cloud computing, and software development, this isn’t just about cost – it’s about staying competitive in a global race for innovation.
A Silver Lining: Rethinking Talent Access
The fee hike doesn’t just close doors; it forces companies to think outside the cubicle. The demand for skilled workers isn’t going anywhere, but the traditional model of bringing Indian talent to the US has now become a high-stakes gamble.
The good news? Businesses don’t need to depend on the H-1B lottery anymore. Forward-thinking firms are exploring alternatives that sidestep the H-1B perplexity altogether – keeping access to India’s talent while slashing costs and red tape.
Alternatives to H-1B for the U.S. Companies
For U.S. companies, the path to Indian talent no longer runs through the H-1B visa. Models like Employers of Record (EORs) and Global Capability Centers (GCCs) offer smarter, compliant alternatives.
1. Employer of Record (EOR) Model
Imagine hiring top-tier Indian talent without setting foot in India or navigating a labyrinth of visa paperwork. That’s the promise of the Employer of Record (EOR) model. An EOR acts as the legal employer on behalf of a U.S. company handling payroll, taxes, benefits and other HR-related tasks, ensures compliance with Indian labour laws – all without requiring a physical office in the country.
Why it works:
a) Flexibility: With EOR, firms can scale up or down without long-term commitment – perfect for startups or businesses dipping their toes into new markets.
b) Compliance: EOR ensures compliance with local regulations – managing taxes, and benefits which include Provident Fund (PF), Employee State Insurance (ESI), gratuity – thereby reducing the risk of non-compliance.
c) Speed: EORs can onboard talent within a few days, ideal for urgent projects or market tests.
d) Cost Savings: With EOR model, there is no need to shell out $100,000 per visa or cover relocation costs or invest in company set up.
2. Offshoring via Global Capability Centers (GCCs)
For businesses playing the long game, Global Capability Centers (GCCs) offer a more strategic approach. These offshore centers, frequently established in tech hubs such as Bengaluru or Hyderabad, operate as subsidiaries of the parent U.S. firm, managing various functions including R&D, IT, finance and customer support. Numerous MNCs are adopting the Build-Operate-Transfer (BOT) model, wherein a third party builds and operates the GCC until it is prepared for transition to the U.S. company.
Reasons for its appeal:
a) Scalability: GCCs can grow in tandem with the business, accommodating everything from specialized AI initiatives to large-scale operations.
b) Control: Post transfer, companies gain full ownership of the operations, safeguarding intellectual property and aligning it with parent company’s goals.
c) Cost Effectiveness: Reduced labour and operational expenses in India help maximize budget efficiency.
The catch? GCCs require upfront investment and careful planning, which make them more appropriate for companies with a defined strategy for expanding offshore.
How to Decide Between EOR and Offshoring (BOT)
When evaluating alternatives, the right choice between EOR and GCC depends on the company’s goals, timeline, and risk appetite. Here’s a quick breakdown:
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Case
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EOR
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GCC/BOT
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Use Case
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Best for short term hires, urgent staffing needs, or testing new markets without long-term commitments.
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Best suited for long-term growth, large-scale operations, and building strategic offshore capabilities.
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Setup time
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Quick deployment within days, with minimal setup.
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Requires a few months for planning, infrastructure development, and regulatory compliance.
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Risk
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Low risk – all HR, tax, and legal compliance are handled by the EOR.
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Higher risk – requires upfront investment but offers long-term control over time.
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Control
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Limited to daily operations; EOR manages HR and compliance.
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Full operational control after the transfer phase, enabling alignment with the parent company’s systems and culture.
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Cost Implication
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Cost-efficient for short-term or small-scale hiring.
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More capital-intensive initially but delivers long-term cost efficiency and ownership value.
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These models, although different, can still be strategically blended together. Start with an EOR for immediate needs, then transition to a GCC as the business scales. It’s a smart playbook for staying agile while building a lasting presence.
Why These Alternatives Work
EOR and GCC models aren’t just walkarounds – they are compliant, cost-effective, and strategic. By hiring talent in India, companies can dodge the $100,000 H-1B fee and the uncertainty associated with visa lottery. EORs streamline payroll, taxes, local contracts, and filings while GCCs provide ownership from the onset and ensure a compliant entity setup. Both models enable firms to tap India’s talent pool without the logistical nightmare of relocation.
The Road Ahead
The H-1B visa hike is a wake-up call for U.S. companies. By pivoting to models like EOR and GCCs, businesses can keep their competitive edge – accessing India’s skilled talent without the crushing costs of visas or the risk of non-compliance. The tech giants – and the startups nipping at their heels – now have a chance to rewrite the playbook, turning a policy roadblock into a launchpad for smarter, more globally connected operations.
At AKM Global, we enable U.S. companies to access India’s talent strategically — offering end-to-end EOR and GCC setup support designed for scale, compliance, and cost efficiency. Reach out to us at info@akmglobal.in to build your global footprint with confidence and compliance.
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