Trump’s visa shock strains India-US ties, clouds trade talks

Core Points - Trump's new visa policy, imposing a $100,000 fee for H-1B applications, significantly impacts India's tech services industry, which is valued at $280 billion and relies heavily on skilled foreign workers [1][6][9] - The recent imposition of 50% tariffs on Indian exports by the Trump administration complicates trade relations, particularly as India continues to purchase oil from Russia [2][4] - The visa changes are expected to shift the focus of India-US trade talks from goods to services, increasing pressure on India's service-driven economy [6][7] Industry Impact - The tech services sector, which constitutes about 55% of India's GDP, faces potential job losses and challenges to its outsourcing models due to the new visa fees [1][6] - The changes in visa policy could lead to a decrease in remittance inflows, which currently amount to nearly $35 billion annually from skilled Indian workers in the US [7] - The tightening of visa regulations may exacerbate the already high youth unemployment rate in India, which is around 40%, and hinder job creation in the domestic market [9][8] Geopolitical Context - The US's demand for India to cease oil purchases from Russia is part of a broader geopolitical strategy, which complicates trade negotiations and may lead to further economic penalties [4][5] - The evolving trade dynamics are increasingly intertwined with geopolitical objectives, making it difficult for India to negotiate favorable terms [5][8] - India's opposition parties criticize the Modi administration for not taking a stronger stance against US pressures, indicating a potential shift in public sentiment regarding US-India relations [10]