Visa Wars: Can India afford tit-for-tat with the US?
A few days ago, the United States announced a new $250 “visa integrity fee” on travellers from India, China, Mexico and Brazil, effective October 1. The rationale, framed under immigration control and border integrity, comes on top of already high base visa charges of $185, pushing the average cost for Indian applicants into the $435–$442 range—among the highest in the world. For Indians, who make up 2.2 million annual visitors to the U.S., the surcharge could amount to nearly $550 million in extra payments each year.
Understandably, the question has been raised in Delhi: should India reciprocate? After all, around 1.8 million Americans visited India in 2024. A similar $250 levy would yield roughly $450 million for the Indian exchequer. On paper, the symmetry looks neat. In practice, however, reciprocity is far more complicated—and for four crucial reasons.
First, affordability is asymmetrical. Indians travelling abroad often stretch family budgets, particularly students and middle-class tourists. A flat $250 adds about 5% to the average spend per trip. For an American traveller, the same amount is little more than a rounding error. What is a deterrent for Indians is pocket change for Americans.
Second, demand is differently elastic. Price elasticity studies show that tourism from middle-income countries is far more sensitive to cost changes than from wealthy nations. A modest rise in U.S. visa fees can shave off thousands of Indian visitors; but a similar rise in Indian visa fees would barely dent American demand. The pain is, therefore, not symmetrical.
Third, the sectoral impact is asymmetrical. For India, the biggest exposure is not tourists but students and professionals. Over 331,000 Indian students are currently enrolled in U.S. universities, and Indians take up 70–72% of H-1B visas annually. Add dependents, and the new fees can raise individual costs to $800. The result is a redirection of students and talent to Canada, the UK, or Australia. By contrast, Americans coming to India are mostly leisure tourists and a sliver of medical travellers. Charging them more may irritate but will not reshape U.S. economic fortunes.
Fourth, India risks self-harm by taxing inbound flows. International tourism is a pillar of India’s services economy. American visitors sustain jobs in hotels, tour operators, and hospitals. A broad surcharge risks dampening this market just as India is trying to expand its global tourism footprint.
Does this mean reciprocity is impossible? Not entirely. A targeted levy—for instance, on high-margin elective medical tourists or luxury travel segments—might make tactical sense, raising revenue without discouraging the bulk of visitors. But across categories such as students, H-1B professionals, or mass tourists, retaliation would be counterproductive.
There is also the longer-term calculus: what if Indians simply stop going to the U.S.? We already see the outlines. Students are looking at Canada, which now hosts nearly 320,000 Indians, and the UK, which has re-emerged as a top destination. Professionals are diversifying to Australia and Germany. The U.S. risks losing tuition dollars, skilled workers, and the soft power built over decades of Indian migration.
For India, however, fewer links with the U.S. mean fewer remittances—$125 billion came in 2023, much of it from America—and diminished economic bridges. Diversification spreads risk, but it does not compensate for the loss of the U.S. pipeline.
The hard truth is this: in the uneven world of global mobility, developing countries like India absorb the shock of higher barriers more acutely than developed economies. Reciprocity may sound righteous, but it could punish India more than it hurts the U.S. The smarter path lies not in tit-for-tat fees but in diplomatic bargaining, sectoral safeguards, and multilateral pressure to highlight the inconsistency of a country that preaches free trade but practises protectionism in mobility.
The visa fee is not just a business issue—it is a political signal. India must read it as such, but respond with strategy, not symbolism.
Way Forward
India must resist the temptation of blanket reciprocity. Retaliatory visa duties may satisfy domestic outrage, but they would harm our own diaspora, students, and professionals more than American travelers. A more prudent path lies in strategic restraint with sectoral focus. For instance, levies on categories such as luxury tourism or non-essential travel — particularly in medical tourism where U.S. patients and their attendants already seek affordable care in India — could signal strength without damaging our broader interests.
Second, economic pragmatism must outweigh political symbolism. As a developing country, India cannot absorb the same shocks that a developed economy can. American travelers would treat higher fees as an irritant; Indian workers, however, would see their careers upended. The asymmetry of impact makes tit-for-tat measures strategically unwise.
Third, India should pursue a diplomatic balancing act, raising the issue at bilateral visa talks, the WTO, and multilateral forums like the G20. By framing it as a violation of the spirit of free mobility, India can turn this into a matter of principle rather than mere grievance.
Finally, the crisis offers an opportunity to diversify tourism and reform India’s own visa regime. By simplifying procedures, expanding e-visas, and negotiating reciprocal arrangements with Europe, East Asia, and the Gulf, India can redirect flows away from the U.S. while strengthening its own global brand as an open, affordable destination.
By: Azher Ahmad
Maleeha Shafi
The Authors are associated with the Global Justice Program, Yale and featured at the University of Chicago, US.
