H-1B visa fee hike: How Indian IT industry can navigate the shift

The U.S. government’s decision to impose a $100,000 one-time fee on all new H-1B visa applications has set off ripples across India’s $250-billion technology services industry, forcing firms to reassess their hiring and delivery strategies. While the immediate financial hit is non-trivial, industry executives and analysts say the move may accelerate a longer-term pivot toward localisation and diversified delivery models.

The rule, announced last week and clarified by the White House on Sunday, applies only to new visa petitions and will not affect renewals or existing H-1B holders. The clarification helped temper initial concerns that had sparked a sell-off in IT stocks. Still, companies with heavy U.S. exposure are recalculating cost implications.

Industry estimates suggest the new fee could add $150–550 million in annual costs for Indian IT players if visa sponsorship volumes remain steady. For majors like Tata Consultancy Services (TCS), Infosys, HCLTech and Wipro, the incremental outgo is material but unlikely to disrupt operations.

“This is an undeniably steep cost, but the limited scope gives firms time to adjust. Most already have localisation strategies in play, which will soften the blow,” said a senior Nasscom executive, requesting anonymity.

A decade-long Shift

Over the past 10 years, Indian IT services companies have reduced their reliance on H-1B visas, steadily expanding their U.S. talent base. Hiring has grown across hubs such as Texas, North Carolina and Ohio, supported by partnerships with universities and training programmes for local graduates. The new fee is expected to accelerate this trend.

“Indian IT has the resilience to absorb these shocks. The fee may hurt margins in the short run but could encourage more sustainable workforce models over time,” noted Equirus Research.

For clients, the immediate risk of project disruption appears low. Analysts say costs are unlikely to trigger large-scale cancellations, though contract renegotiations and modest price hikes could follow. The broader concern, observers add, is whether Washington risks dampening skilled immigration at a time when U.S. demand for tech talent far outpaces local supply.

TCS, which has a relatively higher proportion of on-site staff, may see incremental costs of $150–200 million. But its deep client relationships and offshore-heavy delivery model are expected to cushion the impact.
Infosys, which has invested heavily in U.S. innovation hubs and local hiring, is projected to face an additional $100–150 million in costs.

“Infosys’ localisation strategy is paying off. The impact will be more muted compared to peers,” said an analyst at a Mumbai brokerage.
Wipro and HCLTech could each incur $75–120 million in extra outflow, depending on new visa applications in FY26. Both firms are also leaning on nearshore centres in Mexico and Eastern Europe to mitigate risk.

Mid-tier firms such as Tech Mahindra, LTIMindtree and Mphasis may feel the squeeze more acutely given thinner margins and client concentration. “The mid-tier will likely need to renegotiate aggressively or reconsider which roles justify on-site deployments,” the analyst added.

Talent Supply and Opportunity

The U.S. Bureau of Labour Statistics projects engineering demand to rise 8–10% over the next decade. With 1.5 million engineers graduating annually, India is positioned to supply much of this demand, said Dhriti Prasanna Mahanta, VP & Business Head at TeamLease Degree Apprenticeship.

“India’s strength in software, AI and data science aligns with U.S. needs. If skilling is scaled and education is aligned with global industry requirements, India can cement its role as the world’s top talent supplier,” Mahanta said.

The surge in Global Capability Centres (GCCs) further reflects multinational confidence in India’s workforce. To sustain this edge, India must strengthen skilling and align education with global industry needs. Done right, it could cement India’s position as the world’s leading source of advanced technical talent,” he said.

The Indian government has flagged the new fee as “onerous” and indicated possible diplomatic engagement with Washington. With bilateral technology trade topping $150 billion annually, the issue has become a sensitive point in economic ties.
U.S. policymakers have defended the measure as a way to protect domestic jobs and fund workforce initiatives. That balancing act—between shielding U.S. workers and ensuring access to global talent—will shape the debate in the months ahead.

Nasscom, while reviewing the order, warned that abrupt changes could disrupt America’s innovation ecosystem and unsettle Indian professionals. It pointed out that Indian IT companies have steadily increased local hiring while adhering to U.S. wage and compliance norms.

Looking Ahead

Analysts say the immediate earnings impact is manageable since the fee applies only to future applications. Firms like Cyient, which had just six H-1B employees in FY25, expect no material financial hit.
“The sector is being nudged toward a direction it was already moving—localisation and high-value delivery. The fee acts more as a catalyst than a crisis,” said the IT sector analyst firm.

The H-1B programme has long been symbolic of India’s IT-U.S. technology partnership. While the $100,000 fee marks a turning point, it may ultimately reinforce the industry’s shift toward a more diversified, less visa-dependent future.