Indian IT Giants Brace For $550 MILLION Immigration Bill After US H-1B Visa Fee Hike

India’s top IT services firms are facing a historic rise in operating costs after the US government sharply increased the H-1B visa fee to $100,000, nearly ten times the previous $7,500–10,000, Bloomberg reported. The move could add an estimated $150–550 million in visa costs per firm, potentially cutting operating profits for industry leaders such as Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro by 7–15%, ET reported.The US remains the largest market for Indian IT exports, contributing up to 85% of their revenue and employing 3–5% of the workforce onsite. The hike in H-1B fees affects employees in critical roles requiring US presence. TCS, for instance, had 5,500 employees on H-1B visas in FY25, with upcoming renewals potentially costing

$90,000 per petition.Impact on Project Timelines and MarginsIndustry executives warn that higher fees will disrupt project timelines, renewals, and workforce mobility. Clients could indirectly bear increased costs as firms may pass on the burden rather than absorbing it entirely. “Profitability will be impacted as overhead costs rise, and companies may cut corners on which skills are kept onshore,” said Akshat Vaid, partner at Everest Group, speaking to ET.To mitigate costs, Indian IT firms are expected to accelerate offshoring, leverage gig workers, and expand remote contracting. “This may stretch project implementation timelines, but over time both employees and companies will find new ways of working,” said Aditya Narayan Mishra, CEO of CIEL HR, highlighting a shift toward alternative talent models including offshore delivery and subcontracting.Wider Implications for Indian IT and US TechThe H-1B visa fee hike comes at a time when Indian IT companies face sluggish growth after three years of market challenges and increasing AI adoption. Experts note that the broader $283 billion outsourcing industry may experience renewed margin pressure. Bloomberg reports that Big Tech companies like Google, Amazon, Microsoft, and Meta also account for a significant share of H-1B applications, meaning the fee impact will extend across the global tech ecosystem.Firms are likely to reserve onshore positions for critical skills exempt from the fee, while expanding offshore teams to maintain client service levels. Analysts suggest that localisation and subcontracting, already integral to operations for firms like TCS and Infosys, will be leveraged to contain costs.Client Deals and Negotiations at RiskAlthough the next round of H-1B applications will not open until 2027, visa renewals for $13 billion worth of contracts since July could face uncertainty, affecting negotiations and new project pipelines. Experts warn that IT companies may increase subcontracting and onshore hiring selectively to manage costs, while ensuring critical projects remain on track.The US H-1B visa fee hike represents one of the largest policy shocks to India’s IT outsourcing sector in decades. While margins and client deals may come under pressure, Indian IT companies are relatively well-positioned to adapt through offshore delivery, gig work, and selective onshore hiring. The change underscores the need for firms to diversify global delivery models while managing costs in a rapidly evolving international tech landscape.