As the Trump administration moved to exorbitantly hike H-1B visa fees to prioritise American jobs, many in the industry fear the move could disadvantage Indian IT firms and talent.
Data, however, indicates that Indian IT majors were already cutting down significantly on their H-1B visa applications over the past few years.
Total petitions from eight leading firms, including Tata Consultancy Services, Infosys, and Wipro dropped from 25,475 in 2022 to 14,319 in 2025, according to US Citizenship and Immigration Services. The figures indicate a 44% drop in visa petitions by Indian IT firms over a four year period.
The decline is coupled with a strategic shift towards localisation, with companies like HCL Technologies reporting an 80% local workforce in the US, followed by Tech Mahindra at 70%, Infosys just over 60%, and TCS at about 50%.
Analysts and industry leaders say the move could reshape the global tech talent landscape, accelerate the trend of offshoring, and paradoxically, bolster India’s own burgeoning tech hubs.
Challenge for Mid to Small Firms
US president Donald Trump on September 19 imposed a $100,000 fee on H-1B visa petitions under certain conditions.
Immediately after, Big Tech firms advised H-1B holders to be cautious about travel, especially if they were outside the US, amid fears over re-entry and fee implications. The White House on September 20 clarified that the levy is a one-time charge, not annual, and that it would not apply to existing visa holders or renewals, but only to new applicants beginning with the next lottery cycle.
The rule is applicable to new petitions filed after 12:01 AM on September 21.
Between September 20–21, the Indian tech community, Nasscom, and the Indian government voiced concerns about the abrupt timeline, the broader impact on businesses and families, and the uncertainty surrounding implementation.
In the aftermath, the Indian rupee weakened slightly pressured by the hit to Indian IT stocks.
India’s IT trade body, Nasscom, highlighted that while the long-term impact on large Indian IT firms might be marginal due to their reduced dependency on these visas, the sudden nature of the change “creates considerable uncertainty for businesses, professionals, and students across the world.”
The fee hike is expected to hit smaller and mid-sized IT service companies harder, as they still rely more heavily on H-1B visas.
“This would discourage mass H-1B for lower tech salaries from foreign countries, largely impacting mid to small Indian IT services, followed by mid to small GCCs and US startups trying to hire from foreign lands,” said Gaurav Vasu, founder and CEO of UnearthInsight, a cognitive intelligence platform covering Indian Startups.
Vasu noted that this steep hike in visa fee will not cause a dent to the finances of US tech giants like Amazon and Microsoft, who hire high-skilled foreign workers at salaries well above the minimum threshold.
A report by Motilal Oswal Financial Services reveals that the Big Tech, including Google, Amazon, Microsoft, and Meta, account for a larger share of fresh applications, and Indian vendors are relatively better placed to adapt due to localisation and subcontracting.
It adds that visa applications for FY26 are already locked in, so the $100,000 fee will be applicable from FY27 when new petitions are filed. A firm seeking 5,000 H-1B visas would face an expenditure of $500 million in fees.
The report highlights that if new H-1Bs vanish, on-site revenues and costs would both decline, potentially improving margins given the higher profitability of offshore work, leaving the net effect on earnings per share neutral in the medium term, though top-line growth could slow.
It observed that the order is likely to face legal challenges in the US and may not survive in its current form.
Reverse Brain Drain?
The proposal is “nothing short of a wall against global talent,” according to Sanjay Tripathy, CEO & co-founder of Briskpe, a cross-border payments platform.
By pricing out the world’s best doctors, engineers, and innovators, the US risks stalling its own engine of innovation, he argued.
“Instead, this will accelerate India’s rise as the hub for research, patents, and startups. What the US loses in innovation, India stands to gain in progress and global leadership,” Tripathy added.
Entrepreneurs agree it could be an opportunity for India to harness its domestic talent pool more effectively.
Shantanu Gangal, co-founder & CEO of Prodigal, a California-based AI platform that has built its entire AI and engineering team in India, warned that “startups and smaller businesses may soon find H-1Bs unaffordable, pushing talent to other hubs and risking America’s lead in AI innovation.”
Some companies, however, are projecting minimal financial disturbance.
Engineering and technology firm Cyient, which had only six employees on H-1B visas in FY25, stated it “does not anticipate any material impact on its financials for FY26 and immediate term,” citing its philosophy of building a global enterprise with a local approach to talent.
Persistent Systems said it is not expecting any material impact from the decision. “We will continue to monitor the developments closely and will provide updates as appropriate,” it said in a regulatory filing.
Infosys, TCS, Wipro, HCLTech and other mid-tier companies did not respond to AIM’s queries. However, according to reports, several mid-tier Indian IT firms downplayed the potential impact of the decision, citing their reduced reliance on fresh filings and stronger focus on localisation.
The reaction underscores a broader industry pivot, where years of visa uncertainty have already prompted Indian IT firms to diversify their talent strategies and invest heavily in local hiring within the US, a trend this hefty fee is poised to accelerate.
However, this is not the first time a clarion call was made.
The agenda to “bring jobs back to America” echoed recently in Washington with India in focus.
Republican senator from Ohio, Bernie Moreno, had introduced the Halting International Relocation of Employment Act (HIRE Act), which sought to impose a 25% tax on payments made by American companies to foreign firms for services provided to US customers, mainly targeting outsourcing.
It also blocks such transactions from being tax-deductible, requires companies to report them to the government, and directs the tax proceeds into job training and workforce programs in the US.
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