End of H-1B Lottery Signals Major Shift in US Skilled Immigration Policy

A Structural Redesign of the H-1B System

The United States has announced a fundamental overhaul of the H-1B visa programme , scrapping the long-standing lottery system and replacing it with a weighted, wage-based selection model . Effective from February 27, 2026 , the change will apply to the FY 2027 H-1B cap cycle , covering around 85,000 visas annually . While framed as a move towards “merit-based” migration, the reform carries major implications for India , which accounts for over 70% of H-1B recipients .

What the New Rule Changes

Under the new framework notified by USCIS , applications will no longer be randomly selected. Instead, higher-wage and higher-skill roles will be prioritised, though filings across all wage bands will technically remain eligible. The US government argues that the lottery encouraged bulk filings and suppressed domestic wages.

Why Indian Applicants Are Most Affected

In practice, the reform disproportionately impacts early-career Indian professionals , especially those employed by IT services firms. Many such roles fall into lower wage categories despite requiring technical qualifications. A wage-weighted system naturally favours senior, highly paid professionals, crowding out entry-level engineers and analysts who traditionally formed the backbone of India’s H-1B pipeline.

Policy Signals Beyond the Visa Rule

The reform aligns with other restrictive measures, including a proposed $100,000 additional visa fee and a contrasting “gold card” pathway for wealthy migrants . Together, these indicate a shift towards pricing and filtering immigration by economic value , rather than opportunity or skill potential.

Implications for India and US Employers

For India’s IT sector, the changes weaken a long-standing onsite deployment model and may accelerate offshoring, near-shoring and automation . For US employers, while large firms may benefit, startups and universities could struggle to access affordable global talent.

Important Facts for Exams

• H-1B lottery replaced by weighted selection model

• Change effective from FY 2027 cap cycle

• India receives over 70% of H-1B visas

• System prioritises higher wages and senior skills