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Indian IT/ITeS Sector Hype & Reality through the Lens ofH-1B Visa Exposé


The Indian IT and IT-enabled services (ITeS) sector has longbeen celebrated as a cornerstone of India's economic ascent. With titans likeTCS, Infosys, Wipro, and Cognizant at the helm, the industry generatedapproximately $283 billion in revenue in FY 2025, employing over 5 millionprofessionals and cementing India’s status as the global outsourcing capital.Exports remain its lifeblood, reaching $224 billion—about 27% of India’s totalexports ($825 billion) and nearly 58% of services exports ($387.5 billion).Media narratives often glorify Indian talent as the engine behind SiliconValley’s innovation. Yet, beneath this sheen lies a troubling reality, exposedthrough the U.S. H-1B visa program—a system intended for skilled foreignworkers but plagued by decades of systemic abuse.


Recent developments, including President Trump’s executiveorder imposing a $100,000 one-time fee on new H-1B applications, have reignitedscrutiny. This move, framed as a response to program abuse harming Americanworkers, disproportionately affects Indian nationals, who receive roughly 72%of H-1B visas. Two recent exposés—a Hindu podcast featuring journalist TanulThakur and a Bloomberg investigation—reveal how Indian ITeS firms exploitloopholes, partnering with U.S. corporations to prioritize cost-cutting overgenuine innovation. Drawing on these sources and scholarly critiques by RonHira and Norm Matloff, this essay unpacks the hype versus reality, exposing anindustry built on displacement, exploitation, and lobbying rather thantechnological excellence.


The Origins and Flawed Foundations of the H-1B Program


The H-1B visa, created under the 1990 Immigration Act, wasmarketed as a solution to a STEM talent shortage in the U.S. However, as Thakurexplains in his Hindu interview, the program’s foundation was based on a flawed1986 National Science Foundation study predicting an engineer shortfall by2006—a claim debunked by a 1992 congressional probe. Despite this, thenarrative endured, leading to annual caps of 65,000 visas, later expanded to85,000 through exemptions for academia and nonprofits—reforms shaped byaggressive tech lobbying.


Thakur, author of the forthcoming book Wild Wild East:Exiled Americans, Enslaved Indians, and the Systemic Abuse of the H-1BProgramme, calls the program “a scam that’s so deep, so gargantuan, somindbendingly complex that it makes Trump look like a softy.” He highlightsprevailing wage loopholes that allow employers to pay at the lowest tiers—oftenat the 17th or 34th percentile—saving $70,000–$100,000 per worker annually. UCDavis professor Norm Matloff concurs: “Abuse of H-1B and green cards—includingpaying below-market wages and ‘handcuffing’ workers to keep them from going toanother employer—is widespread.” Bloomberg’s investigation confirms that theprogram, largely unchanged since the dot-com era, now sees 80% of petitions forIndian workers, driven more by outsourcing than by genuine skill shortages.