Indian IT services firms blindsided by the Trump Administration’s sudden move to impose a $100,000 fee for H-1B visa petitions are expected to be impacted by about $750 million - $1 billion annually, amounting to a 7 per cent hit on operating margins in the medium term. The margin pressure will come from both cost increase and emergency visa sponsorship, which the IT companies may be forced to absorb to retain key US projects.
However, profitability of these companies are unlikely to get severely impacted, analysts tracking the Indian IT sector said. It is still not known whether the sponsors of the existing Hi-B visa holders based out of the US will have to pay the increased amount after their 12-month tenure expires. Effective September 21, 2025, the US employers will have to pay a $100,000 annual fee for every new H-1B visa petition, or for H-1B holders seeking to re-enter the US from abroad.
This move represents the largest-ever fee hike for the high-skilled visa programme, with the administration claiming that it will ensure only the “most exceptional” foreign workers are brought in and to curb what it terms as “abuse” of the programme. Nasscom, the lobby group which represents all Indian technology companies, said it will disrupt business continuity for onshore project delivery It said the abrupt one-day deadline and lack of transition time will be major business risks, stating such policy changes should come with greater notice to reduce operational chaos.
The lobby group said Indian companies have long reduced H-1B dependency and moved to more local hiring in the US, but it reiterated that high-skill mobility remains crucial for innovation in both countries. The ability to win new US client deals may be impacted, especially for companies still reliant on rapidly deploying Indian-cadre experts onsite. Smaller or mid-tier firms may face stiffer client negotiations due to less capacity for local hiring. The biggest users of H-1B visas are now US tech giants, not Indian outsourcers, so the overall business pipeline for Indian firms, especially at the top end, should stabilise once operational adjustments are made.
In the near-term, clients expecting immediate onsite presence for complex initiatives may hesitate, leading to project delays or resets in deal terms. Meanwhile, tech companies like TCS, Microsoft, Meta, Apple, Deloitte, and Infosys, which are the largest H-1B sponsors, are warning Indian and other foreign national staff to avoid international travel and to return to the US immediately if already outside, as re-entry may require the employer to pay the $100,000 fee. The directive aims to make H-1B sponsorship far more restrictive and expensive, dramatically reducing the flow of new foreign tech workers—particularly impacting Indian professionals, currently hold 71% of H-1B visas in the US. The $100,000 fee applies to new H-1B petitions and to visa holders outside the US who wish to return, but not to those already in the US (unless they travel internationally and seek to re-enter).
Since the fee applies mainly to those outside the US, companies may decide to keep existing H-1B staff in the US indefinitely, disrupting planned travel, career development rotations, or family returns. Workers caught outside risk being locked out unless the employer pays the fee, which is likely to be done only for critical, highly senior, or client-essential roles. The traditional offshore-onsite model of Indian IT—where early-career employees are rotated into the US for on-the-job training, project launches, or client management—will become more rigid and less attractive.
Companies are likely to prioritize new visas for only the most indispensable or revenuecritical talent. The restriction could reduce the overall number of Indian IT staff in the US, especially at junior and mid-levels. US-based competitors and global delivery centers may benefit as work is shifted to India or alternative locations (such as Canada, the UK, or the UAE), leading to a potential offshoring spike. With fewer staff able to move quickly to US client sites, Indian IT firms will need to renegotiate timelines and service levels, accelerating the use of remote delivery and virtual teams. The focus will shift to retaining talent present in the US and enhancing automation and hybrid project methodologies.
