Mint Explainer | China’s K visa vs US H-1B rules: What it means for India

Interestingly, Beijing last month introduced a K visa policy under which all foreign nationals, including those without a confirmed job, can enter China. For India, this open door policy has created an unusual point of convergence with China at a time of heightened geopolitical competition. Mint explains.

Why the US’s H-1B visa is crucial for India

The US recently revised its H-1B visa framework, tightening eligibility norms, increasing the fee to $100,000 from about $1,000, and imposing additional scrutiny on firms that rely heavily on outsourcing.

These changes make it harder for foreign professionals—particularly from India, which accounts for nearly 71% of all H-1B approvals—to enter and work in the US.

According to the US Citizenship and Immigration Services (USCIS) report released on 29 April, 427,084 H-1B visa petitions were filed in 2023-24, up from 386,559 in FY23. Of these, 35% were for initial employment, and 65% for continued employment. USCIS approved 399,395 petitions in FY24, a 3% increase from 386,318 approvals in the previous fiscal year.

Breaking it down further, 141,205 petitions were approved for initial employment—the highest in the previous four fiscal years—while 258,190 petitions were approved for continuing employment, marking a decline from previous years. Among all approved petitions, 71% were for beneficiaries born in India, followed by China at about 12%.

For thousands of young Indian engineers, the H-1B visa represents a critical pathway to global careers, enabling them to work in leading tech firms, gain international exposure, and contribute to India’s $283-billion information technology (IT) services sector, which derives around 57% of its total revenue from the US market.

Why is this significant in a trade war context?

Trade wars have historically centered on tariffs, quotas, and physical goods. The Trump-era tariffs on steel, aluminium, and Chinese electronics, or the highest-ever 50% tariff on Indian goods effective from 27 August, are examples.

However, by tightening H-1B visa rules, the US has effectively placed a trade barrier on services—something rarely seen at this scale. For the first time, the services economy, which accounted for over 55% of India’s GDP in FY24 according to the Economic Survey 2024-25, is directly affected. Its exports grew by 13.6% to $387.5 billion in FY25.

Restrictions on skilled mobility directly threaten this revenue stream by limiting Indian professionals’ ability to work abroad. Reduced access to key markets could slow growth, constrain project delivery, and impact India’s foreign exchange earnings, while also prompting global tech firms to reconsider where they deploy talent to serve international clients.

How does China fit into this picture?

As the US tightens entry for skilled professionals, Beijing on 7 August announced a K visa policy, effective 1 October. Under this scheme, all foreign nationals—including those without a confirmed job—can apply for the visa and enter China, which opens a more flexible pathway for global talent.

India and China have a shared interest in countering US restrictions that directly affect their services and technology sectors, potentially creating opportunities for talent mobility and regional collaboration.

What does China’s K visa mean for India’s IT sector?

China’s newly announced K visa could create a new avenue for Indian IT services companies to diversify beyond the US. Indian IT firms may explore deploying employees in China to tap into East Asia’s expanding digital economy.

Global tech giants may also reassess regional strategies, considering relocation or expansion of talent bases to more employee-friendly markets. While China’s K visa offers a potential workaround to US restrictions, political and security risks remain a key consideration for companies seeking alternative hubs.

What are the risks involved?

China’s high operational costs, regulatory hurdles, and political risks make full relocation unlikely. Firms may instead adopt a hybrid approach, keeping US operations while establishing smaller hubs in China to tap into new talent and markets without jeopardizing revenues.

“While China’s K visa opens opportunities for talent mobility, full-scale relocation of IT operations from the US is financially risky," said Dattesh Parulekar, assistant professor of International Relations at Goa University.

“Indian IT firms are more likely to explore hybrid models—maintaining the US client base while gradually expanding presence in China and other Asia-Pacific markets—to mitigate H-1B restrictions while balancing costs and revenue potential," he added.

What are the geopolitical implications?

For India, the US remains a critical partner, but the visa squeeze highlights vulnerabilities in overdependence on one market. China’s counter-policy, while not without its own risks, signals an attempt to woo global talent and position itself as a services hub in contrast to Washington’s protectionist turn.

The shift also brings services into the same strategic battleground as semiconductors, energy, and supply chains—sectors already entangled in the US-China rivalry.

What lies ahead?

India will need to recalibrate its strategy. Diversification of markets, strengthening ties with the European Union and the Association of Southeast Asian Nations (Asean), and exploring collaborations with China in non-sensitive sectors could soften the blow.

At the same time, the H-1B episode may push New Delhi to accelerate domestic reforms, improve ease of doing business for global firms, and invest in local talent creation.