Indian firms are bracing for a shake-up after the US Administration imposed a one-time $100,000 fee on new H-1B visa applications. According to analysts, the impact will be uneven with mid-tier and smaller firms that rely heavily on H-1B hires for onsite delivery are likely to feel the sharpest pinch, while larger players with localised US teams and extensive offshore operations will be relatively insulated.
Impact varies by company size
“The $100,000 visa fee entirely offsets the Ebit generated per employee over the visa period,” Jefferies said in its note. “With 7–12% of revenues tied to H-1B holders, firms will need to renegotiate contracts, shift towards local hiring, or expand offshoring”, it added. ICICI Securities said that the levy could create a margin headwind and earnings impact for firms dependent on fresh H-1B hires, but that localisation and an optimal employee pyramid can mitigate most of the effect for larger vendors. Ambit Capital noted that “in practical terms, this measure essentially shuts out new H-1B visas except in extreme cases,” highlighting the pressure on companies that have not diversified delivery models.
Since the levy will be a one-time charge on FY27 petitions, renewals and current visa holders will remain unaffected. Yet analysts said that the policy signals a broader shift — the visa-driven arbitrage that underpinned growth and margins for years is narrowing, forcing a pivot to local hiring, subcontracting, and nearshoring.
Market reaction and strategic response
Industry body Nasscom stressed the strategic importance of talent mobility, noting, “Skilled talent mobility will be central to enabling businesses to make forward-looking investment decisions, accelerate research, and strengthen nations’ position in the global innovation economy”. It said that it anticipates only a marginal impact for the sector as a result of the hike. “Moreover, with the fee being applicable from 2026 onward, it gives companies time to further step up skilling programmes in the US and enhance local hiring,” Nasscom said.
Indian IT firms’ reliance on H-1B visas has been shrinking. Approvals for leading firms fell from nearly 14,800 in 2015 to just over 10,000 in 2024, accounting for less than 1% of total employees. Large firms now place only 3–5% of their workforce in the US under H-1B visas, while mid-tier companies often have a higher proportion, leaving them more exposed.
Some firms have already de-risked. Hexaware Technologies said it had not filed any fresh H-1B cap applications in 2025 and expects no material financial or operational impact, citing localisation and flexible talent deployment.
Markets reflected the divergence. On Monday mid-tier firms bore the brunt — LTIMindtree, Persistent Systems, Mphasis and Coforge fell 4–5%, collectively erasing nearly Rs 17,000 crore in market value. Tech Mahindra shed 3%, while larger players remained relatively stable.