Australia’s graduate visa fee hikes undercut its diplomacy with India

Over a three-day visit to Melbourne for the third Australia-India annual summit, Indian Prime Minister Narendra Modi and Australian Prime Minister Anthony Albanese finalised 18 agreements and outcomes covering defence, maritime security, energy (including uranium), critical technology, and education and skills partnerships.

Missing from that list was any new migration announcement – a key driver that could underpin a fully-fledged trade agreement built on people-to-people ties. Indian graduates are the centre of that story.

A week before Modi’s visit, Australia quietly made it significantly more expensive for international graduates to remain. The application fee (Opens in new window) for the Temporary Graduate (Subclass 485) visa rose to $5,750 on 1 July, following an increase from $2300 to $4600 in March. The cost has risen by around 150%, with no advance public notice on either occasion.

The increase is part of a broader series of visa hikes. A Home Affairs spokesperson says the changes will help ensure the migration system operates “in the national interest” (Opens in new window). Officials have pointed to data (Opens in new window) showing graduates, particularly from South Asia, using the 485 visa to bring dependants, a legal entitlement giving full working rights. This is now framed as a pressure point requiring tighter controls. The stated goal is to screen out applicants with weak connections to Australia, but it doesn’t explain why the burden falls hardest on those who have already done everything Australia asked of them.

By the time graduates apply for the 485 visas, they have already invested years of study and training, and substantial financial resources into becoming exactly the kind of skilled migrants the government wants, as the education-to-migration pipeline has become one of Australia’s most effective pathways for attracting and retaining skilled workers. The latest fee increases risk turning that pipeline into a bottleneck.

Many graduates are entering a saturated labour market that is already skewed against temporary visa-holders and are at their lowest earning capacity yet are expected to pay a non-refundable application fee of $5,750 to remain eligible to gain the work experience the migration system increasingly demands.

The increase hits every nationality on the pathway. But is particularly significant for India, Australia’s second-largest source of international students (Opens in new window). Indian graduates make-up up by far the largest cohort of (Opens in new window) 485 visa holders. Indian applicants face one of the highest student visa refusal rates, with 40% (Opens in new window) refused in early 2026, making the journey to study and work in Australia increasingly uncertain.

Migration is central to the Australia–India relationship, as mobility (Opens in new window) is strategically important to New Delhi. The Australia–India Economic Cooperation and Trade Agreement (ECTA) grants eligible Indian graduates an additional year of post-study work rights, reflecting both countries’ interest in greater pathways for skilled professionals. Those rights mean little if the barrier to accessing them keeps growing.

It is also strategically short-sighted. Australia’s post-study visa application fees now exceed those in competitor countries such as Canada and the United Kingdom, giving prospective students a clear incentive to look elsewhere. Losing that competition does not just mean forfeiting tuition revenue; it risks pricing Australia out of the global market for international students and eroding a major source of soft power.

This matters at a time when Australia faces persistent skills shortages and has signalled a preference for sourcing skilled migrants from within its existing onshore (Opens in new window) pool. That ambition is difficult to reconcile with policy settings that make it significantly harder for those already here to remain.

The politics are equally telling. A Senate motion (Opens in new window) to disallow the March fee increase failed to secure the support of either Labor or the Coalition, a sign, against a backdrop of rising anti-immigration sentiment and racial tension, of just how little cross-partisan will exists to advocate for a future built on temporary migration. Temporary pathways are Australia’s single largest source of permanent migrants (Opens in new window), and domestic political pressures do not change how these decisions are perceived abroad. For India, sharply increasing the cost of post-study work sends a conflicting message.

This is where soft power stops being an abstract concept. It is not built in joint statements but in the lived experiences of those who pass through a country’s institutions. A graduate who studies, works and contributes to Australia, only to face drastically rising costs at the point of transition, is unlikely to view the country as a reliable partner. Multiply that across thousands of Indian graduates each year, and the implications extend well beyond migration policy.

What’s missing on both sides is a comprehensive, long-term picture of how this diaspora moves through Australia’s migration system, beyond headline statistics on income and trade. Which visa pathways graduates rely on and their journey to residency remain poorly understood and under-researched. Treating the diaspora as a genuine pillar of the relationship starts with measuring that experience.

Modi and Albanese leave Melbourne having reaffirmed the depth of the Australia–India relationship, at least on paper. But partnerships aren’t sustained by what governments sign but by how people experience them. For Australia’s largest diaspora, migration is that experience. Eighteen agreements and outcomes, and none addressing the pathway Indian graduates rely on, is a missed opportunity.