The US has announced a massive hike in H-1B visa application fees, raising the cost from ~$1700-$6500 to $100,000 per year.
This is a median jump of 2,111% which can deeply impact Indian professionals and the companies that rely on them for skilled talent.
Before the recent change, the total cost of applying for an H-1B remained relatively stable.
Effective September 21, 2025, the move is being framed by President Trump as a way to prevent “systemic abuse” of the program and safeguard American workers.
For Indian IT firms and startups that depend heavily on H-1B talent, this sudden cost surge could completely change hiring economics and force companies to rethink their US expansion plans.
For Indian IT services giants, the steep H-1B fee hike is a major challenge, but not an entirely unexpected shock.
Over the past few years, firms like TCS, Infosys, and Wipro have deliberately reduced reliance on H-1B visas by hiring more locally in the U.S., setting up near-shore centers, and strengthening offshore delivery.
These steps have helped soften the immediate blow, though companies with a more H-1B-heavy employee base will still face a significant financial hit.
In short, the proactive shifts in talent strategy mean the sector is better prepared today than a decade ago, but the cost burden remains heavy.
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Over the past decade, Indian IT majors have steadily cut back on their reliance on H-1B visas, reducing approvals by more than half between FY2015 and FY2023. TCS, Infosys, and Wipro now hire a majority of their U.S. workforce locally, with H-1B staff forming only a fraction of operations compared to earlier years.
TCS continues to be a large beneficiary with over 5,500 approvals in 2025, but stresses that it uses only 3,000–4,000 visas annually, while Infosys and Wipro have brought down their dependency to near 20–24%. HCLTech and Tech Mahindra also maintain relatively low visa reliance, each hovering around the 20–30% mark.
This shift shows a clear long-term strategy to mitigate U.S. policy risks by building stronger local and near-shore teams.
The sharp rise in H-1B visa costs is set to squeeze profit margins across Indian IT firms, though the hit will vary by company.
EBIT could shrink by significantly for firms with heavier visa dependency if costs can’t be passed on to clients based current disclosures and publicly available data.
Industry experts believe the sector will face short-term pain, but longer term, strategies like greater offshoring, GCC expansion, and AI-led efficiency gains will help restore stability.
The $100,000 H-1B fee hike could reshape the balance between Indian IT companies and U.S. tech giants, which are now the program’s heaviest users.
I do believe that this move will weaken America’s ability to attract top global talent, risking its edge in innovation and AI competition against emerging markets.
On the flip-side, countries like Canada and Australia could gain from a talent shift if the U.S. becomes harder to access. In the short run, firms would scramble to adjust, but in the longer run, higher costs are likely here to stay even if companies adapt their models.
The Trump administration’s $100,000 annual H-1B fee can be a COVID level event for Indian IT, adding massive cost pressures even as past efforts to cut visa dependency cushion some of the blow.
Firms with heavier H-1B reliance will suffer sharper margin compression, while others lean on local hiring, offshore shifts, and automation maybe able to adapt.
This new reality may permanently reshape IT’s global delivery model, forcing companies to balance cost, geography, and technology.
As legal battles play out, the broader direction of U.S. policy points to tighter and costlier immigration pathways.
“The bigger question is whether these curbs truly protect American workers or instead weaken U.S. innovation by pushing talent and growth to more welcoming countries.”
The average EBIT of the above five companies is ~30,941.32 crores. The new H1B visa fee would be roughly ~₹88.09 lakhs. If we take an average of 2196 H1B visas on only 5 companies, the amount roughly comes to ~1,934.98 crores, which is 6% of the average EBIT. This is only a base case assumption based on current disclosures.
*Non OES in this salary table refers to jobs that don’t fall under the U.S. government’s Occupational Employment Statistics (OES) wage surveys
From an employee perspective, unless you are a FAANG H-1B in the 90th percentile or above, the utility gain of an H1B will now only be affordable for some.
For any company that hires H-1B employees earning under $200,000 pre-tax, the new $100,000 visa fee instantly adds a massive cost burden. To put it simply, if an employee is paid $150,000, total direct expenses for the employer were $150,000 plus a small prior visa fee (about $4,500). Now, with the $100,000 annual fee, that same employee costs the company $250,000—an increase of about 67%. For salaries right at $200,000, the hike equals a full 50% jump in wage-related costs.
This makes talent at the mid- or senior-engineer level far less affordable and squeezes margins, especially for firms with large H-1B head counts.
Practically, companies will be forced either to raise client prices, replace affected roles with local hires, or increasingly shift offshore. The sharp expense bump fundamentally changes hiring economics, pushing companies to rethink who they hire in the U.S. and how they bid for projects there.
They say one should never kill the goose that lays a golden egg, I am now thinking to myself, while unveiling the 'Gold Card’ did President Trump do just that?
In other more positive news, India has received three major sovereign rating upgrades in 2025, reflecting rising global confidence in its economy.
In May, Morningstar DBRS upgraded India to ‘BBB’ from ‘BBB (low)’, followed by S&P’s upgrade to ‘BBB’ from ‘BBB-’ in August—the first such move by S&P in nearly 19 years.
Now, Japan’s R&I has pushed India up to ‘BBB+’ while retaining a ‘stable’ outlook, underlining India’s progress in fiscal consolidation, policy stability, and sustained economic growth.
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