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Indian Students Drive US International Numbers As Domestic Ecosystem Trails

India remains the top source of US international students despite visa challenges, according to a latest report by Open Doors.

XIPHIAS Editorial Desk
December 01, 2025
Publisher: BW Businessworld

XIPHIAS point of view

This trend is being driven by a structural gap, not a short-term “visa mood swing”:

Research depth and lab infrastructure remain concentrated in a limited number of Indian institutions.
Early-career deep tech / core R&D / cutting-edge healthcare roles at scale are still limited.
Students are increasingly applying with portfolio thinking—US as a premium outcome, but with credible Plan B options.

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Research intensity and lab infrastructure available only at a small scale across Indian institutions, along with fewer high-productivity, high-pay roles in deep tech, core R&D and cutting-edge healthcare, continue to drive India’s position as the largest source of international students in the United States, followed by China and South Korea. Experts told BW Businessworld that such structural gaps are sustaining demand despite visa challenges and stricter scrutiny.

India remained the leading place of origin with roughly 3.6 lakh international students in the United States in 2024–25, recording around ten per cent year-on-year growth. China and South Korea followed. This comes even as the United States reported a seventeen per cent decline in new international student enrolments across American universities, according to the Open Doors Report 2025 released on 17 November 2025. The trends emerge against the backdrop of the US administration’s decision to increase visa fees.

Deep Tech And Research Capacity Constraints Remain The Core Drivers

Experts explained that structural limitations in India’s research ecosystem continue to push aspirants towards US universities. They noted that research intensity and lab infrastructure at scale remain concentrated in a relatively small number of Indian institutions, restricting opportunities for students seeking advanced work in AI, biotech, clean energy and materials science.

Shantanu Rooj, Founder and Chief Executive Officer, TeamLease, said these gaps shape outbound choices. He explained that students pursuing frontier work see US institutions as better equipped and that India’s early-career landscape still lacks sufficient high-productivity, high-pay roles in deep tech and healthcare. Rooj noted that weak research ecosystems and limited job depth create an inherent push factor. He said, “Structural gaps still push many aspirants towards the US… research intensity and lab infrastructure at scale are still concentrated in a relatively small set of Indian institutions… the early-career job market in India still offers fewer high-productivity, high-pay roles in deep tech, core R&D and cutting-edge healthcare compared to what similar talent can access in the US.”

Rooj added that while industry–academia linkages, such as internships, co-ops and structured on-campus research roles, are improving, they are not yet as embedded in India as on US campuses. “Together, these factors mean that for a certain segment of high-aspiration Indian students and professionals, the US still represents a faster route to global exposure, higher earnings and experience on the technological frontier,” he said.

Early indicators for Fall 2025 show that while India also experienced a moderation in fresh applications, the decline remains far smaller than the global average, allowing it to retain and widen its lead.

Sanjay Laul, Founder, MSM Unify, said the largest divide remains between academia and industry. He explained that many Indian graduates do not receive adequate training in practical, innovation-led or research-oriented competencies. He noted that India’s domestic market is still unable to produce enough high-value positions in advanced engineering, biotech, deep tech and research, restricting career progression. Laul said, “The biggest divide is between academia and industry… many graduates still aren’t trained in practical, research-oriented or innovation-led skills… domestic job markets are not accomplishing the creation of a sufficient number of high-value positions… the only way India can outperform the US… is by making the US the natural launching ground for ambitious talent.”

Experts said the gaps extend beyond academic settings and into India’s employment landscape, where large-scale innovation pathways and globally benchmarked compensation structures remain limited.

R. P. Yadav, Chairman and Managing Director, Genius HRTech, said these structural deficiencies shape decisions for early-career professionals. He explained that India continues to fall short in terms of deep-tech research facilities and innovation platforms. He noted that US roles and compensation structures remain more compelling for skilled talent. He said, “Gaps remain in deep-tech research facilities, large-scale innovation opportunities and globally benchmarked compensation structures. The US still provides a breadth of roles and innovation depth that many professionals find compelling.”

Why The US Remains Attractive Despite Visa Costs

Following the US H-1B visa fee of USD 100,000, first announced on 19 September, the US Citizenship and Immigration Services (USCIS) clarified that the new fee would not apply to existing visa holders or students already residing in the country. The exemption covers international students shifting from F-1 to H-1B visas and those transitioning from L-1 to H-1B, offering relief to many Indian professionals.

A report by GTRI explained the significance of the exemption. It noted that the exemption ensures continuity for Indian talent. The report said, “This ensures continuity for thousands of Indian students and skilled professionals in the US, who can now transition to work visas without incurring exorbitant costs or leaving the country.”

Rooj explained that fee hikes and scrutiny raise costs for employers, especially smaller ones. He noted that while large tech and healthcare companies may absorb much of the increase, they are likely to become more selective, prioritising high-skill roles. He said, “Announced H-1B fee hikes and tighter scrutiny raise the cost of sponsoring international talent… Indian students are responding to long-term opportunity, not short-term friction… the US still offers the deepest cutting-edge research in Stem and access to high-wage innovation economies.”

Rooj added that demand is likely to moderate rather than decline. He noted that growth in 2024–25, following a sharper spike the previous year, indicates cooling from a high base. He said, “Demand is unlikely to disappear; it is more likely to moderate and become more selective… three parallel trends… strong demand for top-tier US STEM and business schools; more caution around second-tier options; and rising interest in Plan B destinations such as Canada and some European hubs.”

Varun Singh, MD, XIPHIAS Immigration, said that while higher H-1B fees may slow filings for mid-sized firms and first-time sponsors, large US employers will continue absorbing costs due to persistent Stem talent needs. Singh said tougher adjudications affect processing speed, but not demand, and Indian students will keep choosing the US for research depth, salaries and long-term mobility. “The fee increase is real, but its impact on hiring is more nuanced. Large employers in technology, consulting, engineering and healthcare will absorb the higher H-1B filing costs because their dependency on global Stem talent remains high. Where we see friction is among mid-sized companies, start-ups and first-time H-1B sponsors, many are becoming more selective, delaying filings, or preferring candidates with US master’s degrees who already qualify under Stem-OPT. Stricter adjudications also mean more documentation, employer-employee relationship proofs, and compliance checks. This slows the hiring pipeline but does not shrink demand. The US talent gap, especially in AI, semiconductor design and cybersecurity- ensures continued hiring of skilled Indian professionals.”

He further noted that long-term student interest will remain firm as the US continues offering the clearest global career pathway. “Despite visible headwinds, we expect demand to remain strong and gradually rise over the next 2–3 years. Indian student enrollments grew by 35%+ last year, and early 2025 data indicate continued interest in Stem, business analytics, public health, and cybersecurity programmes. The US job market is cyclical, but its long-term skill shortages, in digital engineering, research, healthcare, and advanced manufacturing, will sustain opportunities for international graduates. Visa challenges may slow the pace but not reverse the trend. For Indian families, the US still offers the clearest pathway to global careers: world-class education, high salary premiums, strong research ecosystems and long-term mobility. We foresee stabilisation in 2025–26, followed by steady upward momentum.”

ApplyBoard’s annual report noted that international students, including those from India, increasingly prioritise affordability, employability and policy stability over traditional prestige. The report said that volatility in destination policies and global economic pressures are prompting families to reassess return on investment more closely.

Laul explained that Indian students continue to prefer the US due to its strong ROI. Indirectly citing wage and mobility advantages, he said, “Indian students are still choosing the US because the ROI on education and career opportunities is unparalleled… the US remains the destination with higher salaries, greater exposure to innovation and more visible long-term mobility opportunities compared to other countries.”

US Labour Market Faces Its Own Stress

The Trump administration earlier said the USD 100,000 fee aims to ensure that entrants brought into the country are “highly skilled” and do not replace American workers. Ironically, the US is witnessing its own rising labour-market stress for educated workers, who now make up a record 25.3 per cent of total unemployed Americans, more than double the proportion during the 2008 financial crisis.

Government data for September 2025 shows that more than 1.9 million Americans aged twenty-five and older with at least a bachelor’s degree are unemployed, the highest proportion since tracking began in 1992. The unemployment rate for workers with degrees rose to 2.8 per cent, up half a percentage point from the previous year.

FAQs

For many STEM and research-heavy tracks, the US still offers stronger lab ecosystems, deeper research intensity, and clearer early-career pathways through CPT/OPT and employer pipelines.

The combination of limited research infrastructure at scale and fewer high-productivity early-career roles in deep tech, core R&D, and cutting-edge healthcare pushes top-aspiration profiles to look abroad.

Demand may become more selective (stronger preference for top-tier programs and employability outcomes), but it is unlikely to disappear because the underlying opportunity gap remains structural.

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