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Who Pays For Visa Wall?
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Good Morning. US president Donald Trump’s $100,000 H1B fee hike made headlines as a blow to Indian IT. But the real losers may not be TCS and Infosys. It will likely be American universities, which depend on full-paying Indian students to keep their balance sheets rolling.
Indian markets retreated for the fifth consecutive session on Thursday as stocks of information technology companies nosedived. The BSE Sensex lost 556 points, closing at 81,160 or 0.68% lower. Meanwhile, the Nifty50 was down by 166 points, closing at 81,160 or 66% lower.
In other news, starting this week, our newsletter comes with a quick three-question quiz to test how closely you’ve been following the news — take a shot and see how you score and share with your friends!
Trump’s H1B Fee Hurts American Students, Not Indian IT: Here’s Why
Last Friday, US president Donald Trump increased the fee for an H1B visa to $100,000. This would force American companies to hire more American college graduates and stop the practice of companies bringing in low-paid workers from abroad to work in the US, he said.
The majority consensus was that Indian information technology (IT) services companies like TCS, Infosys, and Wipro would be hit. This is plain wrong. The people who would be hurt the most are American students at American universities.
Indians overtook the Chinese as the largest national contingent of foreign students in US universities in 2024. They pay the full sticker price for their education: one estimate says that while they account for 12% of the student population, they contribute 28% of the tuition fees collected. This means that foreign students cross-subsidise American students.
With the H1B visa fee hike, a fresh graduate would have to secure a job with a starting salary of $183,000 ($83,000 is the minimum remuneration required to hire a foreign worker under H1B). Very few jobs are available for a fresh graduate at that salary. Which means that the visa fee hike makes the American job market outside the reach of a fresh graduate. Why, then, would they enrol in a US university in the first place?
Sure, graduate students might still go to the US to pursue courses in areas such as artificial intelligence and biotechnology, where someone with a PhD might earn a salary that covers the cost of the visa. US universities are facing a demographic crunch, with admissions having peaked in 2010. If foreign students are shut out, thanks to the visa fee hike for a job after their education, some universities would struggle.
IT Will Adapt
What about Indian IT companies? They would adapt. They would automate the work that can be automated, relocate some workers to nearby jurisdictions like Canada and Mexico, which offer locations close enough for US-based supervisors to fly in and manage teams, and find ways to get much of the work done back in India.
The competition to Indian IT services companies would face similar labour shortages as Indian IT companies, and Indian IT companies would pass on the additional cost of adapting work to fewer workers on H1B visas to their clients. The cost borne by American companies that engage Indian IT service companies would go up, that is all.
Meanwhile, providing clear evidence that capitalism and democracy, however imperfect each might be, reinforce each other, ABC decided to bring back late-night TV host Jimmy Kimmel, after suspending his shows following his comments on the killing of Charlie Kirk, the rightwing youth activist.
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CORE NUMBER
$7.03 billion
That’s the value of the deal the government recently signed with Hindustan Aeronautics Limited (HAL), to procure 97 Tejas Mk-1A fighter aircraft over six years, beginning FY 2027-28. This is a follow-on order; India had previously contracted 83 Tejas jets in 2021, though it’s still waiting on all deliveries.
The Backstory: HAL attributes the previous contract’s delay to US-based General Electric (GE), which makes the engines HAL uses. GE says the delay happened due to challenges in restarting the production lines after Covid. HAL says deliveries will stabilise this fiscal year.
What This Means Going Forward: This is a significant moment for India; the Indian government has talked often about indigenising arms manufacturing. Right now, India ranks among the highest importers of arms in the world. Previously, the country imported arms from Russia, though for the past few decades, it branched out to the US and Israel, too.
FROM THE PERIPHERY
Oil Trade Dilemma
India has told Washington that reducing Russian crude imports would only be feasible if the US eased sanctions on Iranian and Venezuelan oil, offering refiners alternative discounted supplies. According to Business Standard, an Indian delegation in the US this week stressed that cutting all three sources could inflate global prices.
The Lead: Despite US tariffs, India continues to buy Russian oil, benefiting from cheaper barrels averaging $68.90 in July versus $74–77 from US and Saudi suppliers.
Overview: Commerce Minister Piyush Goyal said India seeks to expand US energy ties, but officials warned that without access to sanctioned oil, costs and import bills will rise.
FMCGs Snap Up D2C Brands
Indian FMCG (fast moving consumer goods) major players are aggressively acquiring direct-to-consumer (D2C) brands to diversify into premium and niche categories, according to a recent report by credit ratings agency CRISIL. The deals give FMCG firms access to consumer insights, faster feedback cycles and new product adjacencies, while D2C players gain scale and profitability support.
By the Numbers: Hindustan Unilever’s Rs 2,706 crore purchase of Minimalist, Marico’s acquisition of Beardo, and ITC’s stake in Yoga Bar rank among the biggest buyouts in the last five years.
The Lead: Around two-thirds of FMCG acquisitions in the past five years targeted D2C brands, mostly in personal care, health and wellness, and specialised ingredients segments, underscoring consolidation across the consumer goods sector.
Sales Slip, Value Rises
India’s housing market in Q3 2025 showed mixed signals: sales volumes dipped 9% YoY to 97,080 units across the top 7 cities, but sales value rose 14% to Rs 1.52 lakh crore, led by luxury demand. As per the Anarock report, MMR and Pune dominated with 48% of sales, while Chennai (+33%) and Kolkata (+4%) bucked the slowdown.
Flashpoint: New supply rose 3% YoY to 96,690 units, led again by MMR and Pune. Unsold inventory eased slightly to 5.61 lakh units. Prices grew 9% YoY, with NCR topping at 24%. Developers leaned toward high-end launches, with luxury homes (>Rs 1.5 crore) forming 38% of new supply.
Backstory: Sales fell from 1.20+ lakh units in Q3 2023 to 1.07 lakh in Q3 2024, further dipping to 96,285 in Q2 2025 before stabilising at 97,080 in Q3 2025. Yet, sales value rose 14% YoY in Q3 2025, driven by luxury and premium homes. MMR and Pune remained dominant, while Chennai and Kolkata emerged as growth outliers. In contrast, Hyderabad cooled and affordability weakened as developers leaned toward high-end supply.
THE CORE QUIZ
Under the latest GST Council changes, which slabs saw rate cuts? |
Which Indian conglomerate has been expanding aggressively into the Global Capability Centres (GCC) model? |
Which PSU oil company announced plans to set up 2G ethanol plants using crop residue? |
PODCASTS
Why The H-1B Visa Issue Has Hit The Markets
On Episode 688 of The Core Report, financial journalist Govindraj Ethiraj talks to Siddharth Vora, Head of Quant and Fund Manager at PL Asset Management. We also feature an excerpt from our series Manthan by Sahamati.
Why the H1B visa issue has hit the markets more than the 50% tariffs.
An once in a few decades IPO boom this month will strain liquidity.
Even as the world waits for singularity, Wall Street is concerned about circularity!
China is reaching out to more countries to keep their gold safely.
An interesting Govt-led initiative to unify all your insurance needs is under way.
The Hype and Hard Truth of Studying in Germany
Just last week, the US slapped a $100,000 fee on new H-1B visa applicants. This is one of many moves that's turning Indian students away from the US and UK. But there’s a new destination rising: Germany.
According to consultancy Upgrad, only 13% of surveyed students applied to study in Germany back in 2022. By 2024, that number jumped to 32%.
So what’s pulling Indians toward Germany? Find out in the latest episode of The Signal Daily.
Listen to The Signal Daily on Youtube, Apple Podcasts and Spotify.
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