The United States’ decision to scrap the lottery-based H-1B visa system and replace it with a weighted selection model marks the most consequential redesign of the programme in decades. For India — which accounts for the overwhelming majority of H-1B beneficiaries — the implications are stark. While the reform is being pitched as a move towards “merit-based” migration, it is likely to shut the door on thousands of entry-level Indian professionals who have traditionally used the H-1B route to access the US labour market.
What the New H-1B Rule Changes
Under the new regulation notified by the United States Citizenship and Immigration Services, the random lottery used to allocate H-1B visas will be replaced by a weighted selection process. This system will prioritise applications offering higher wages and requiring higher skill levels, while still nominally allowing applications across all wage bands.
The rule, issued by the US Department of Homeland Security, will come into effect on February 27, 2026, and will apply to the FY 2027 H-1B cap registration cycle. Each year, the change will affect roughly 85,000 visas — 65,000 under the general cap and an additional 20,000 reserved for applicants with a US master’s degree or higher.
Why the Trump Administration Is Scrapping the Lottery
The overhaul is part of President Donald Trump’s broader push to reshape skilled immigration. The administration argues that the lottery system was being “exploited” by employers to hire foreign workers at wages lower than those paid to Americans.
USCIS spokesperson Matthew Tragesser has said the random selection model incentivised volume-based filings rather than genuine skill shortages. A weighted system, the administration believes, will align visas more closely with economic value, productivity and wage levels.
Why Indian Applicants Are Most at Risk
In practice, the shift hits Indian applicants hardest. Indians receive over 70% of H-1B visas annually, many of them early-career professionals employed by IT services firms. These roles often fall in lower wage bands despite requiring technical qualifications.
A wage-weighted selection system inherently disadvantages such applicants. Entry-level engineers, analysts and junior consultants — the traditional backbone of India’s H-1B pipeline — are likely to be crowded out by senior professionals commanding higher salaries, often sponsored by US firms rather than offshore service providers.
The $100,000 Fee and the ‘Gold Card’ Signal
The visa rule must also be read alongside other measures introduced by the Trump administration. A presidential proclamation now requires employers to pay an additional $100,000 per H-1B visa — a move currently under legal challenge. This sharply raises the cost of hiring foreign professionals and tilts the system further towards high-margin firms and elite talent.
At the other end of the spectrum is Trump’s proposed $1 million “gold card” visa, which offers wealthy individuals a pathway to US citizenship. Together, these initiatives signal a clear policy direction: immigration access is increasingly being priced and filtered by economic value rather than opportunity.
Implications for India’s IT Services Model
For India’s IT sector, the changes strike at a long-standing operating model built on deploying young engineers to the US market. A weighted H-1B system, combined with steep visa fees, erodes the cost arbitrage that made this model viable.