The street is busy analysing the impact of higher H-1B visa fee on the tech sector and the Services exports being dragged into the ongoing global trade and tech war. However, can this translate into renewed growth opportunities for the Global Capability Centres?
A recent note by Emkay highlights that with H-1B visa fee hike and US engineers costing nearly five times more than their Indian counterparts, companies may accelerate offshoring, automation, and the shift work to GCCs in India. Emkay also warns that Indian IT export growth may slip below 4%.
GCCs to drive India’s services exports with $150 billion market by 2029
The country already hosts over 1,800 GCCs. This number is projected to cross 2,000 by 2030 as per Nasscom analysis. However, the market could be now expanding at an annual rate of 18% over the next 5 years as per Emkay.
Emkay estimates that the GCC market could be exceeding $150 billion by 2029. GCC exports, currently estimated at over $65 billion, are becoming a key driver of India’s services exports.
IT export growth may slip below 4% in FY26: Emkay
Emkay’s report elaborated that the short-term impact on Indian IT revenue and profit margins is likely to be limited but the concerns may deepen if the higher fee continues. Indian IT exports, which stood at $181 billion gross and $160 billion net in FY25, could see growth slip to 4% in FY26 from the expected 5% growth prediction.
The report warns that “high-touch, client-facing roles like consulting could be constrained,” which may slow US revenue growth and squeeze margins. Smaller and mid-sized IT firms that still rely heavily on traditional onsite staffing models are more exposed.
Emkay keeps FY26 services export forecast unchanged
However, despite the H-1B visa fee hike, Emkay has kept its FY26 services exports forecast unchanged, expecting the current account deficit to remain at 1.2% of GDP and net remittances at around $120 billion. However, the firm warns of “downside risk” if the visa policy tightens further or if the proposed US HIRE Act, which could tax outsourcing payments by 25%, becomes law.
Large IT firms better cushioned against H-1B shock
Emkay highlighted that higher pay at GCCs could make it harder for Indian startups and smaller tech companies to hire skilled talent. They may have to look to tier-2 Indian cities or even shift some operations to lower-cost countries like the Philippines to stay competitive.
Emkay economist Madhavi Arora said, “In the short to medium term we do see an increase in risk premium amid rising policy and geopolitical uncertainty.” However, the report highlight that large IT companies are better poised as they have already reduced their dependence on H-1B visas to 20–50% of US operations. They have also increased local hiring to 50–70% of their US workforce and expanded delivery centres across America. However, medium and smaller IT firms, which still depend on the traditional “bodyshopping” model of sending Indian employees onsite, are likely to face more pressure.