Days after Donald Trump telephoned Prime Minister Narendra Modi to wish him on his 75th birthday, the president of the United States of America has disabused any notion that he is seeking a thaw with India by striking a blow to a pillar of bilateral relations. His administration's announcement that the fee for H-1B visas would be raised to $100,000 has sent shockwaves among large sections of the Indian diaspora in the US, thousands of Indians who have worked towards careers in America, and India's biggest information technology companies. The White House secretary has clarified that this will be a one-time fee and applied to new visas only. American companies have used H-1B visas for decades to hire skilled professionals across multiple fields — science, technology and medicine among them — to fill gaps in that country's workforce. More than 70% of the 730,000 people currently on H-1B visas in the US are Indians. The assurance that the fee hike will not apply to existing H-1B visas notwithstanding, it would take an enormous leap of faith for individuals and companies to trust Mr Trump’s dispensation. Whether this contentious matter has a bearing on the trade talks between India and the US will be closely watched.

The loss, though, will be India's and America's. Earnings from the supply of trained Indian workers have long served as an important part of the financial model of India's IT sector. This may be disrupted. American companies, which were counting on getting highly-qualified professionals from India at an affordable cost, would have to rethink the economics of that equation. Replacing overseas workers will not be easy for US firms either. It is tempting to argue that this crisis could be an opportunity for India: if the same talent that goes to the US and sets up innovative firms stays at home instead, that surely will be good news for India. In a speech on Sunday, Mr Modi, too, spoke of the need for India to build more domestically. The reality, however, is challenging. The country needs an ecosystem that supports innovation, public infrastructure that can keep talented professionals in India, and competitive pay and growth possibilities. Without these, Indians who have long viewed the US as the country to emigrate to will seek out new destinations.