Hello Manish,
The supported approach is to make the USB device accessible to the VM through one of the following methods. The most common is to attach the USB dongle to the host, then create a Remote Desktop session into the VM with USB redirection enabled. In the RDP client, under Local Resources > More, select the USB device so it is redirected into the VM session. This works well for security dongles and keytags that rely on USB presence.
Another option is to use USB over Network software or a USB‑to‑IP device server. These tools present the USB device as a network resource, which the VM can then access as if it were local. This is often used in enterprise environments where dongles must be shared across multiple VMs.
If the dongle is a storage device, you can mount it on the host and then expose it to the VM as a VHDX file or pass the physical disk through using Hyper‑V Manager. But for security dongles, the RDP redirection method is the only supported Microsoft approach.
In short, Hyper‑V does not allow direct USB passthrough. You need to use RDP USB redirection or a USB‑over‑IP solution to make the dongle available inside the VM.
I hope you've found something useful here. If it helps you get more insight into the issue, it's appreciated to accept the answer. Should you have more questions, feel free to leave a message. Have a nice day!
Domic Vo.