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đź“°India Presses the U.S. on H-1B Visas | Daily India Briefing

Three stories on Indian markets that you can't miss.

September 23, 2025

India presses the U.S. on H-1B visas. The country’s economic momentum slowed slightly in September thus far. The SEBI and RBI plans simplify and speed up entry for overseas investors.

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1. India Seeks Access for Workers After H-1B Blow

India will press the US to ease mobility for skilled workers in ongoing trade talks, after Trump’s surprise decision to impose steep restrictions on H-1B visas threatened the nation’s IT sector and remittance flows.

Commerce Minister Piyush Goyal is leading negotiations in Washington this week, where Indian officials will push for provisions covering the movement of professionals, particularly IT workers, alongside discussions on goods. Trade talks had until now focused primarily on tariffs.

Trump’s new rules, which include a $100,000 (₹8.8 million) fee on fresh H-1B applications, disproportionately hit Indians, who make up nearly two-thirds of the visa program. The move has raised concerns over India’s $280 billion (₹24.8 trillion) tech services industry and the livelihoods of thousands of workers, many of whom remit earnings back home.

India’s services sector accounts for more than half of GDP, making worker mobility a critical bargaining point. Officials in New Delhi are also weighing the broader impact of Trump’s 50 percent tariffs on Indian exports, half of which were tied to the country’s continued purchases of Russian oil.

The push mirrors India’s stance in other trade talks, including with the UK and European Union, where worker mobility was a sticking point. Whether Washington is willing to accommodate New Delhi’s demands remains uncertain, as Trump has tied concessions to curbs on Russian energy imports.

2. India’s Economic Momentum Cools

India’s economic activity lost some steam in September after Trump’s punitive tariffs on Indian exports began to bite, early survey data showed Tuesday.

HSBC’s flash purchasing managers’ indices (PMIs) signaled easing momentum across both manufacturing and services. The manufacturing PMI slipped to 58.5 from 59.3 in August, while the services gauge moderated to 61.6 from 62.9. Together, the composite index fell to 61.9 versus 63.2 a month earlier, still well above the 50 mark that separates expansion from contraction, but marking the second straight slowdown.

PMIs are closely watched surveys of business activity, covering orders, output, hiring, and sentiment. Because they capture real-time shifts across factories and service providers, they serve as an early barometer of economic health, often moving ahead of official GDP data.

“The 50 percent tariffs likely resulted in a slower rise in new export orders over August–September,” said Pranjul Bhandari, chief India economist at HSBC. She noted that domestic orders continued to climb, supported by recent cuts in the goods and services tax (GST), which buoyed sentiment and partly offset weaker exports.

The impact is most pronounced for exporters in sectors like textiles, chemicals, and engineering goods, who now face shrinking overseas demand. Smaller firms dependent on US orders risk job cuts, while corporates are bracing for thinner margins. For the broader economy, weaker exports mean slower income growth and pressure on manufacturing-linked jobs, even as domestic consumption is being propped up by tax relief.

Modi’s administration expects growth of 6.3 percent–6.8 percent this year, but economists warn that sustained export weakness could test that outlook.

3. India Plans Faster Entry for Foreign Investors

RBI Governor

India’s market regulator and central bank are working on measures to simplify and speed up entry for overseas investors, aiming to strengthen foreign flows amid trade pressures and weak sentiment, four people familiar with the matter said.

The SEBI and the RBI are in advanced discussions to align documentation requirements for new foreign portfolio investors (FPIs). Under the plan, overseas funds that are already regulated in their home jurisdictions would face fewer disclosure requirements and less scrutiny, the sources said, requesting anonymity as the talks are private.

The streamlined process could cut registration times to 30–60 days from nearly six months at present, bringing India closer to global standards. Regulators believe the move will make Indian markets more accessible at a time when foreign flows have lagged, partly due to heightened volatility and concerns over US tariffs on Indian exports.

The proposals are part of a broader effort to maintain confidence in India’s $5 trillion (₹443.6 trillion) economy and ensure stable capital inflows. Regulators have been coordinating more closely after the US imposed punitive tariffs in August, a move that rattled investor sentiment.

If implemented, the reforms could help offset some of the drag from global headwinds by attracting longer-term institutional investors into Indian equities and debt markets.

See you tomorrow.

Written by Eshaan Chanda & Yash Tibrewal. Edited by Shreyas Sinha.

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