What is the story about?
What's Happening?
President Trump has imposed a $100,000 fee for new H-1B visas, prompting India's $283 billion IT sector to rethink its strategy of rotating skilled talent into U.S. projects. This move affects companies like Tata Consultancy Services, Infosys, and Wipro, which rely heavily on U.S. work visa programs. The sector earns 57% of its revenue from the U.S., and the new fee is expected to disrupt the onsite-offshore model, pressuring margins and supply chains. Industry body Nasscom warns of potential ripple effects on America's innovation ecosystem.
Why It's Important?
The fee increase is part of a broader global trade and tech war, potentially reshaping the IT industry's approach to U.S. operations. It may lead to more local hiring in the U.S., increased automation, and reduced outsourcing. This could impact job mobility and the availability of skilled foreign nationals in the U.S. The move is expected to accelerate the growth of global capability centers, particularly in India, which could host more than 2,200 companies by 2030.
What's Next?
Legal challenges to the fee are anticipated, with several lawsuits expected soon. Companies may become more selective in sponsoring H-1B candidates, reserving filings for critical roles. The Indian IT sector faces additional challenges, including a proposed 25% tax on outsourcing payments and weak revenue growth in the U.S. market.
Beyond the Headlines
The restructuring of the H-1B program could lead to long-term shifts in the global IT services market, with increased pressure on automation and AI delivery. The move may also influence the strategic roles and capabilities of global capability centers in India.
AI Generated Content
Do you find this article useful?
