An Indian-American policy organisation has formally urged the US Department of Homeland Security (DHS) and US Citizenship and Immigration Services (USCIS) to withdraw a proposed additional fee of $103,265 for cap-subject H-1B petitions, cautioning that the measure could cripple startups, erode America's technological competitiveness, and drive high-value employment overseas. The warning came from the Foundation for India and Indian Diaspora Studies (FIIDS) on 25 August.

What FIIDS Is Asking For

FIIDS called on DHS and USCIS to adopt a more proportionate funding model — one that protects American workers without restricting access to global talent. The organisation said it supported legal and merit-based immigration, fair compensation, and strong anti-fraud measures, but argued that the proposed fee crosses a threshold that makes legitimate recruitment economically impractical.

The group also acknowledged the genuine costs involved in processing applications, preventing fraud, conducting national security checks, and administering the legal immigration system — but maintained that the burden should not fall disproportionately on a single visa category.

The Financial Burden on Startups and Large Firms

For cash-strapped startups, a $103,265 charge to hire a single skilled worker could fundamentally alter recruitment decisions, FIIDS warned. At the other end of the scale, large technology companies sponsoring thousands of employees could face hundreds of millions of dollars in cumulative costs — and, in some cases, close to a billion dollars in additional expenditure.

Khanderao Kand, chief of policy and strategy at FIIDS, put it directly: 'A $103,265 H-1B fee could choke cash-strapped startups, while companies hiring thousands of H-1B workers could face hundreds of millions of dollars — and potentially close to a billion dollars — in additional costs.'

'If employing critical talent in the United States becomes substantially more expensive than hiring workers abroad, companies could move jobs and investments out of the country,' the organisation added.

The OPT Compounding Effect

FIIDS also flagged the combined financial impact of the proposed H-1B fee alongside a separately proposed $100,000 fee affecting Optional Practical Training (OPT). If both charges applied to the student-to-employment pathway, the total burden on a single individual transitioning from an American university to skilled work could reach $203,265.

Kand warned: 'Combined with a potential $100,000 OPT fee, totaling $203,265, the policy risks making the student-to-work pathway effectively unaffordable.' Such a cost, the group argued, could undermine OPT as a bridge between US higher education and the domestic labour market.

International Student Pipeline Already Under Pressure

The proposal arrives at a particularly sensitive moment. Citing data from the Institute of International Education, FIIDS noted that new international student enrolment in the United States fell by 17 per cent in autumn 2025. A 2026 outlook from NAFSA projected as many as 111,000 fewer international students — a possible 9.5 per cent decline — representing an economic loss of up to $3.4 billion.

This is the backdrop against which the new fee is being proposed, making the timing, critics argue, particularly ill-judged.

Funding and the Path Forward

USCIS already receives around 96 per cent of its funding through fees paid by applicants and petitioners, according to FIIDS. The organisation called on Congress to consider funding immigration administration through existing revenue, appropriations, and reasonable fees rather than placing an exceptional burden on one legal immigration category.

'We urge DHS and USCIS to find a more proportionate funding approach, Congress to ensure adequate agency funding, and industry to make America's talent needs clear,' Kand said. 'Protecting American workers and maintaining America's technological leadership must go hand in hand.'

Indian nationals have historically formed the largest group of H-1B beneficiaries, particularly in technology, engineering, and other skilled sectors. With the international student pipeline weakening and fee proposals stacking up, the next policy decision from DHS will be closely watched by employers, universities, and the Indian diaspora alike.