India pulls global IT talent inward as U.S. settlement formula falters, redrawing the post–H-1B map

U.S. visa tightening cuts off long-term settlement paths
India absorbs returning talent as a core growth asset
U.S.-centric tech order fragments, attention shifts to India

As restrictions around U.S. professional work visas tighten, major changes are emerging in how global Big Tech firms deploy talent. Alphabet, Google’s parent company, has joined this shift by designating India as its next strategic hub. Highly skilled professionals who studied and built careers in the United States now face growing uncertainty over long-term residency, while India, backed by government-led support, has moved aggressively to attract companies and talent alike. As the U.S. IT industry—long strengthened by absorbing global talent—shows signs of structural gaps, speculation is growing that parts of Silicon Valley’s core functions could relocate to India.

The U.S. becomes a “temporary option”

Alphabet is positioning India as a next-generation artificial intelligence hub and is seeking to secure up to about 2.4 million square meters of office space in “Alembic City” within the Whitefield tech district of Bengaluru. Alphabet has already leased one office tower and completed option contracts on two additional buildings. If Google occupies the entire complex, it could accommodate an additional 20,000 employees, far exceeding its current India workforce of roughly 14,000. Given Google’s global headcount of about 190,000, India’s share would rise to around 18%.

This move reflects the combined impact of U.S. immigration tightening and growing pressure on multinational firms to diversify operational supply chains. As the traditional pathway for highly skilled foreign professionals to settle long-term in the United States destabilizes, Big Tech firms are being forced to overhaul workforce strategies. The once-predictable formula—STEM students graduating from U.S. universities, moving through the Optional Practical Training program, securing H-1B visas, and eventually obtaining permanent residency—no longer functions as a reliable route.

Under the Trump administration, the H-1B system was broadly tightened. Application costs were raised to as much as $100,000 per case, while additional screening and background checks expanded. For companies, the cost and administrative risk of bringing talent to the United States surged. For individuals, even those with advanced degrees and experience faced uncertain residency prospects. Long-term U.S. career planning was pushed aside in favor of work in less restrictive regions or outright return to home countries.

Alphabet’s expansion in India illustrates how these shifts are being translated into corporate strategy. Rather than treating India as a cost-saving outpost or secondary base, the company is securing office space capable of hosting large-scale teams and potentially relocating core development functions. This signals fractures in the talent map that had been centered on the United States. The flow of global tech talent, once concentrated in America, is beginning to redirect toward India as institutional barriers and corporate responses converge.

India strengthens its domestic technology ecosystem

India has seized the opportunity created by tightening U.S. H-1B policies, moving aggressively to absorb returning talent. In October last year, the Ministry of Electronics and Information Technology approved seven projects worth about $615 million under the first round of the Electronic Components Manufacturing Scheme, then approved 17 additional projects a month later, bringing total spending to about $797 million. The government expects these initiatives to generate roughly $72.3 billion in production and create 11,800 direct jobs.

In artificial intelligence, India has rapidly expanded R&D capacity to absorb returning professionals. The government approved $1.2 billion in funding for the IndiaAI Mission, making it the world’s third-largest government-led AI investment after the United States and China. As part of the program, the ministry committed to providing 19,000 research GPUs, including 13,000 Nvidia H200 units, and supporting development of six large-scale AI models. These measures have created conditions for Indian researchers and engineers trained abroad to participate in domestic projects, pushing India’s AI research toward independent model development.

Corporate hiring has advanced in parallel with policy support. Tata Electronics, part of the Tata Group, partnered with the National Institute of Electronics and Information Technology’s Kohima center to launch semiconductor back-end workforce training programs, systematically cultivating talent in assembly, testing, marking, and packaging. Together, these moves show India’s strategy goes beyond encouraging “reverse migration,” instead focusing on building industrial and research environments that allow returning talent to settle long-term. U.S. visa barriers, unintentionally, are accelerating India’s technological self-reliance.

Potential rise of a new IT and AI hub

For decades, Silicon Valley’s dominance rested on the belief that U.S. technological leadership stemmed from its ability to attract highly skilled foreign professionals through mechanisms like H-1B visas. The U.S. tech industry relied on global talent to meet R&D demand beyond what domestic labor alone could supply, reinforcing a cycle in which innovation drew more talent, and talent fueled further innovation.

That cycle weakened rapidly as H-1B restrictions intensified. As of late last year, Indian nationals accounted for 283,397 of 399,395 H-1B holders, or 71%. The impact of tighter policies therefore concentrates on specific countries and industries. While existing visa holders and renewals may feel limited short-term effects, sustained declines in new inflows could gradually shrink the R&D labor pool. Analysts expect the consequences of policy changes to surface with a lag, eventually translating into competitiveness gaps.

This outlook implies that many functions long performed in Silicon Valley could migrate overseas. Global firms have already been distributing R&D and operations based on cost and talent access, and visa barriers may accelerate this trend. Apple supplier Foxconn invested $2.8 billion to build an iPhone manufacturing plant in Bengaluru, while German software firm SAP has begun constructing its largest R&D center outside Germany in India.

State and central governments have reinforced these moves with incentives including corporate tax reductions, R&D subsidies, capital grants of up to 20%, production-linked incentives of 2.5% annually for seven years, electricity fee exemptions, and property tax rebates. These conditions form a practical foundation for shifting development and operational work that once concentrated in Silicon Valley. While H-1B contraction is unlikely to erode U.S. technological leadership overnight, the cumulative impact of altered talent flows suggests gradual but unavoidable changes to Silicon Valley’s standing as the world’s premier tech hub.