By: Soumya Bhowmick
Questions of high-skill immigration have animated U.S. politics for several years, including in the run-up to the recent mid-term elections. Between Vice President JD Vance’s remark that he would support eliminating the H-1B high-skill visa program, a new $100,000 payment on certain visa petitions (now blocked by federal court orders pending appeal), and a wage-weighted lottery that favors higher-paid applicants, the world’s largest market for skilled talent is becoming harder to enter. Indian workers and students are among the most exposed. F-1 student visas issued by the United States to Indians in the peak admission months of 2025 fell by 62% from a year earlier.
Migration is often framed as a brain drain, but labor economics are more nuanced. The prospect of working abroad raises the expected returns to education and encourages more people to invest in skills. When the United States expanded visas for nurses, nine more nurses were licensed in the Philippines for each one who migrated. India’s engineering and information technology workforce grew partly on a similar promise. Returning migrants and diaspora networks also bring back knowledge, capital, and business connections. Restricting mobility therefore changes not only how many people leave, but the incentives to acquire skills in the first place. For the United States, concerns about wages and opportunities for American workers are legitimate, and the wage-weighted lottery is partly designed to address them. However, if restrictions push skilled workers towards competing economies and push innovation-intensive work offshore, the United States may retain fewer of the gains from the talent it once attracted.
The fact is that when people find it harder to move, work tends to move instead. Research shows that H-1B restrictions in the United States led U.S. multinationals to expand employment at their foreign affiliates, particularly in India, China, and Canada. India’s Global Capability Centers (GCCs), which now number more than 2,000, have grown mainly on the strength of its talent pool and cost efficiency. Tighter visa rules are likely to reinforce that trend. Talent is therefore increasingly becoming an instrument of economic statecraft. While the United States is tightening entry, other economies with aging workforces are actively competing for skilled workers from the Global South. Europe has stepped up efforts to attract Indian students and professionals, and India has signed 28 migration and mobility partnership agreements or their equivalents with 26 countries.
For a developing country such as India, the questions surrounding high-skill labor mobility are larger than just visas. Over the next decade, the sharpest divide in developing-country labor markets will be between workers who can operate in critical and emerging technological sectors, such as artificial intelligence (AI) and advanced manufacturing, and those who cannot. This emerging high-skill labor market is skill-biased. High-skill jobs emphasize technical and problem-solving abilities while automating many routine tasks that once offered steady employment. The International Labour Organization (ILO) finds that the clerical, sales, and manufacturing jobs that traditionally served as entry points for young workers are shrinking quickly. In developing economies such as India, where most young workers are in informal jobs, these middle-skill roles have been the main bridge from informal work to formal, better-paid employment. If that bridge narrows, the gap between a small, highly skilled workforce and a large, informal one will widen.
Two sets of measures could help. Skills, mobility, and offshoring are closely linked, yet governments usually handle them separately, through different ministries and negotiations. Managing them holistically would help developing countries widen their skills-base even as access to traditional destinations becomes less certain. To this end, making skills portable and embedding them in international partnerships would help. Developing countries such as India could align training in AI, data, and advanced manufacturing with internationally recognized standards, and build mutual recognition of qualifications into mobility agreements and the services chapters of trade agreements. Technology partnerships, including between India and the United States, should treat talent as a core pillar rather than leaving it to periodic visa debates, including through shared data on skill shortages and wages that can address domestic labor concerns with evidence.
The second is to treat offshoring and mobility as complements rather than substitutes. GCCs and technology parks in India can anchor apprenticeships and industry-designed curricula in smaller cities, so that the work moving to India builds skills beyond a narrow elite. Better data on digital skills, broken down by region and gender, would help direct these efforts where gaps are widest. Countries that invest in portable, industry-relevant skills will be better placed to build domestic capabilities and to engage global labor markets on more equal terms, whichever way the politics of migration turns.
Soumya Bhowmick is Deputy Director and Fellow of the Centre for New Economic Diplomacy at the Observer Research Foundation in Kolkata.