The United States has extended its $100,000 H-1B restriction for another year and has now suspended green-card processing for several major technology companies. For Indian manufacturers, the implications are more nuanced than the headlines suggest.
By MFG Magazine | October 2026
The Big Question: Is This a Manufacturing Crisis for India?
The United States is tightening its skilled-worker immigration policies, and Indian professionals and technology companies are among those most exposed to the changes.
In September 2025, the Trump administration introduced a $100,000 payment requirement for certain new H-1B petitions involving workers outside the United States. In September 2026, it extended the restriction for another year, through September 21, 2027, subject to the policy’s exceptions and ongoing legal challenges. Then, on October 8, 2026, the administration suspended new and pending employment-based permanent labour certification applications involving several major technology companies, including Microsoft, Infosys, Tata Consultancy Services, Wipro and HCL Technologies.
These developments raise a legitimate question for India’s business community: Could restrictions on Indian skilled workers in America eventually hurt Indian manufacturing?
The short answer is that the impact will vary considerably by industry. Companies supplying software, engineering services and specialised technical expertise to US clients face more direct exposure. Manufacturers exporting physical products to America face a different set of risks.
For most Indian factory owners, there is no reason to treat the H-1B issue alone as an immediate manufacturing crisis. However, businesses with substantial US customer exposure, technology dependencies or cross-border engineering operations should pay attention.
The distinction matters because immigration policy, trade policy and industrial competitiveness affect businesses through different channels.
1. What Has Actually Changed in US H-1B Policy?
The H-1B visa allows US employers to employ foreign professionals in qualifying specialty occupations. It is particularly important in technology, engineering, research and other highly skilled fields.
The recent changes involve two separate policy developments.
The $100,000 payment requirement
The US administration introduced the requirement in September 2025 for certain new H-1B petitions involving workers outside the United States. The administration extended the restriction in September 2026 until September 21, 2027, subject to exceptions.
This is not a blanket $100,000 charge on every Indian professional, every existing H-1B visa or every visa renewal. The distinction between a new petition for a worker abroad and an existing employee’s status is important.
The measure has also faced legal challenges, including a federal court ruling in June 2026 against the original fee. Businesses should therefore verify the current enforceability and applicability of the requirement with qualified US immigration counsel before making hiring or relocation decisions.
The October 2026 green-card suspension
On October 8, Reuters reported that the US administration had suspended new and pending applications under the PERM labour-certification process involving several named technology companies.
PERM is an employer-led process used in many employment-based green-card cases. It is not the same as an H-1B visa.
The suspension can complicate the longer-term permanent-residency pathway for affected employees, but it does not automatically cancel their existing H-1B visas.
Reuters also reported that the affected companies had sought almost three million foreign workers since 2009 and received more than 230,000 H-1B approvals. These figures relate to the named companies collectively over many years; they are not the number of workers whose current visas have been cancelled.
Sources: White House H-1B proclamation, September 2026 | Reuters, October 8, 2026
2. Why India Is Particularly Exposed
The numbers explain why this issue attracts so much attention in India.
According to US Citizenship and Immigration Services data for fiscal year 2024, people born in India accounted for approximately 71% of approved H-1B petitions, compared with around 12% for people born in China.
USCIS reported 399,395 approved H-1B petitions in FY2024, including both initial and continuing employment petitions.
These figures establish the scale of India’s exposure to the programme. However, they do not mean that 71% of Indian manufacturing workers or Indian engineers depend on H-1B visas. The data covers H-1B beneficiaries across occupations and employment situations, not manufacturing alone.
India’s exposure is particularly significant in IT services, software development, consulting, enterprise systems and other knowledge-intensive activities that serve US customers.
For example, an Indian technology-services company may need specialists to work at a customer’s US facility, support a complex implementation or manage a project requiring substantial on-site coordination. If obtaining work authorisation becomes more expensive or uncertain, the company may need to change its delivery model.
A factory exporting automotive components, industrial equipment or metal parts to an American buyer does not automatically face the same visa-related cost.
The first conclusion is clear: India’s high share of H-1B approvals creates significant exposure for the technology and professional-services ecosystem, but it cannot be used as a direct measure of the risk facing Indian manufacturing.
Source: USCIS, Characteristics of H-1B Specialty Occupation Workers, FY2024
3. What Does This Mean for Indian Manufacturing?
The impact on manufacturing is best understood through four channels.
A. Engineering and technology services could become more complicated
Modern factories depend on software and specialist expertise for automation, production planning, enterprise resource planning (ERP), industrial cybersecurity, digital twins, product design and advanced analytics.
Indian engineering and technology-services companies support many global industrial businesses in these areas.
If sending specialists to the United States becomes more expensive or difficult, service providers may respond by:
- Delivering more work remotely from India.
- Establishing or expanding US-based local teams.
- Using more local subcontractors or implementation partners.
- Redesigning projects to reduce the need for on-site specialists.
- Increasing investment in automation and remote support tools.
These are potential business responses, not proof that every provider will adopt them.
For manufacturers, the practical question is whether these changes affect project costs, delivery timelines, commissioning support or access to specialist expertise.
A factory implementing a new production line may care less about the visa policy itself than about whether the automation engineer can arrive on schedule.
B. Digital transformation projects could face delivery risks
Manufacturing companies increasingly rely on technology partners to integrate machinery, ERP platforms, production systems and analytics.
Some implementations require engineers to be physically present for plant commissioning, troubleshooting, training or system integration. Other work can be performed remotely.
If a technology provider has relied heavily on temporary assignments to the United States, tighter immigration rules could affect how it staffs particular projects.
However, the impact is not universal. Many factory operations take place entirely in India, and many technology projects can be delivered from Indian engineering centres without requiring personnel to relocate to America.
For Indian manufacturers, the sensible response is to assess critical technology projects for dependency on overseas personnel, rather than assume that all digitalisation initiatives will become more expensive.
C. Global technology companies may reconsider where work is performed
Higher immigration costs can influence how multinational businesses allocate work across countries.
A company might hire more locally in the United States, retain more engineering work in India, automate certain activities or redistribute responsibilities across international offices.
For India, the outcome could go in either direction.
Some work could move away from Indian service providers if customers build more local capacity. Alternatively, companies could continue using Indian engineering centres for work that does not require physical presence in the United States.
Indian manufacturers may benefit indirectly if industrial software development, product engineering, analytics or design work remains based in India. But such benefits are not automatic, and the H-1B changes alone do not establish that manufacturing investment will shift to India.
D. Physical exports face a different set of risks
An Indian company exporting castings, forgings, automotive components, machinery or industrial equipment to an American customer is not ordinarily required to obtain an H-1B visa simply to manufacture and export those goods.
Its competitiveness is more directly influenced by:
- US import tariffs and trade agreements.
- Product-specific duties and regulatory requirements.
- Exchange-rate movements.
- Freight and logistics costs.
- Customer demand and inventory levels.
- Product quality, lead times and pricing.
H-1B restrictions may affect a manufacturer’s US-based engineering, installation or support arrangements, but they do not, by themselves, impose a new import duty on its products.
This is the critical distinction Indian factory owners need to understand.
4. The Trade Numbers Tell a Different Story
To understand the exposure of Indian manufacturers, it helps to look at the scale of India–US trade.
According to the Office of the United States Trade Representative, US imports of goods from India totalled approximately $103.8 billion in 2025, up 18.9% from 2024. Total US–India goods trade reached approximately $149.1 billion.
These figures cover merchandise trade, including manufactured goods and other products. They demonstrate the commercial importance of the US market to Indian exporters, but they do not isolate manufacturing exports or measure the impact of immigration policy.
India’s Department of Commerce trade portal also reported that the US accounted for approximately 20.75% of India’s merchandise exports in calendar year 2025.
The implication is important: US demand and trade conditions matter enormously to Indian exporters. However, the H-1B policy is only one element of the wider business environment.
For companies selling physical goods, tariffs, sourcing decisions, landed costs and customer demand can be more direct drivers of profitability than work-visa restrictions.
For engineering and technology-service providers, immigration policy may have a more immediate effect on how contracts are staffed and delivered.
Source: US Trade Representative — India Trade Summary | India Department of Commerce — Trade Analytics
5. Could India Actually Benefit From the Changes?
There are plausible opportunities, but they need to be evaluated carefully.
Opportunity 1: More engineering work could remain in India
Companies may decide to deliver a larger share of software development, engineering design, analytics and technical support from Indian facilities rather than relocate additional employees to the United States.
Indian engineering centres and service providers with strong technical capabilities could benefit from this shift.
For manufacturing companies, it could also improve access to remote engineering expertise, provided the work can be delivered effectively from India.
Opportunity 2: Indian industrial technology providers could become more valuable
If businesses seek to reduce their dependence on employees travelling internationally, technologies that enable remote monitoring, remote diagnostics, automated reporting and AI-assisted decision-making may become more attractive.
For example, a manufacturer might use remote machine diagnostics instead of requiring a specialist to travel for every operational issue.
But this is not a guaranteed consequence of visa restrictions. The business case must still be established through measurable savings, reliability, security and service quality.
Opportunity 3: Indian manufacturing suppliers can compete on capability
Global manufacturers choose suppliers based on a combination of cost, quality, delivery reliability, engineering capability, compliance and supply-chain resilience.
Indian suppliers that improve these capabilities may be well positioned to win business, regardless of changes in US immigration policy.
However, there is no automatic transfer of American manufacturing orders to India simply because the H-1B programme becomes more restrictive.
A US factory’s decision to source components from India is fundamentally different from its decision to hire an Indian engineer in the United States.
Opportunity 4: Engineering talent may find more opportunities at home
If some Indian professionals reconsider overseas employment, Indian businesses could have a larger pool of experienced candidates to recruit from.
Manufacturers looking for specialists in automation, robotics, industrial software, product development and advanced manufacturing may find opportunities to attract talent.
But the outcome will depend on salary expectations, the availability of suitable jobs, working conditions and the growth of India’s industrial ecosystem. A change in US visa policy alone does not guarantee that experienced professionals will move into Indian manufacturing.
6. Which Indian Manufacturers Should Pay Attention?
Not every company needs to respond in the same way.
| Business type | Potential exposure | What to monitor |
|---|---|---|
| Automotive component exporters | Low direct visa exposure; trade exposure may be significant | US customer demand, tariffs and sourcing decisions |
| Foundries, forging and machining companies | Generally low direct exposure | Export orders, customer concentration and landed costs |
| Industrial machinery and equipment makers | Moderate if US installation and service require overseas specialists | Commissioning schedules and local service arrangements |
| Engineering and product-design firms | Potentially high where contracts depend on US-based personnel | Staffing costs, work authorisation and project delivery |
| IT and industrial software providers | Higher direct exposure to H-1B and related employment restrictions | US hiring, delivery models and immigration compliance |
| Factory automation and systems integrators | Variable, depending on the need for on-site deployment | Specialist availability, service agreements and project timelines |
| Indian factories supplying US multinationals | Indirect and contract-specific | Customer investment plans, supply-chain changes and procurement decisions |
These are qualitative assessments, not measured industry-wide impact scores. Actual exposure depends on each company’s business model, US revenue, workforce structure and customer contracts.
7. What Should Indian Factory Owners Do Now?
For most manufacturers, the right response is not to panic or make major investment decisions based on immigration headlines.
Instead, management should conduct a practical risk review.
First, map US exposure. Identify how much revenue comes from US customers and distinguish physical exports from engineering services and on-site support.
Second, identify critical personnel dependencies. Determine whether plant commissioning, technical support or customer projects depend on specialists travelling to the United States.
Third, review service agreements. Check who is responsible for travel delays, additional staffing costs, commissioning schedules and alternative delivery arrangements.
Fourth, evaluate remote delivery capabilities. Remote diagnostics, digital documentation, simulation and secure remote support may reduce travel requirements where technically appropriate.
Fifth, monitor trade policy separately. Exporters should track tariffs, customs requirements, trade negotiations and product-specific duties independently of immigration policy.
Sixth, avoid speculative hiring decisions. Do not assume that a large wave of returning Indian professionals will automatically become available to manufacturing businesses. Recruit according to actual skills requirements and business demand.
8. The Bigger Issue: Immigration Policy Is Not Industrial Policy
The H-1B debate is fundamentally about access to skilled workers, employment conditions and the rules governing foreign professionals in the United States.
Manufacturing competitiveness is influenced by a much wider range of factors: technology adoption, productivity, energy costs, infrastructure, capital investment, skills, supply-chain resilience and market access.
These issues intersect, but they are not interchangeable.
A manufacturer with an efficient plant, competitive products and diversified customers is not automatically threatened by a change in US work-visa rules. Conversely, a manufacturer heavily dependent on a US-based technical team or a small number of American customers may face meaningful indirect risks.
The same policy can therefore create very different outcomes for two businesses in the same industry.
For Indian manufacturing leaders, the priority should be to understand the specific channels through which their business could be affected instead of reacting to the headline alone.
Final Verdict: Should Indian Manufacturers Worry?
They should monitor the development, but the level of concern should depend on their actual exposure.
For manufacturers exporting physical goods, the immediate business questions remain tariffs, pricing, quality, delivery, customer demand and supply-chain competitiveness. The H-1B restrictions do not automatically create new duties on Indian manufactured products or cancel export orders.
For engineering-services companies, technology providers and manufacturers dependent on US-based technical personnel, the policy changes deserve closer attention. Staffing costs, project schedules, customer support and long-term talent planning could all be affected.
India may find opportunities in remote engineering, digital delivery and domestic talent development, but these are possibilities to pursue—not guaranteed benefits of US immigration restrictions.
Ultimately, the companies best placed to respond will be those that understand their exposure, build flexible delivery models and remain competitive on the fundamentals of manufacturing.
The question for Indian industry is not simply whether the United States is making it harder to hire foreign professionals. It is whether Indian businesses can use this changing environment to strengthen their engineering capabilities, improve productivity and become more competitive suppliers to the world.
Editorial note: Immigration rules and related litigation are evolving. This article reflects publicly reported developments available as of October 13, 2026. The legal status of the $100,000 payment requirement and the scope of the PERM suspension should be verified against current official guidance before business decisions are made.
