A proposal announced by former US President Donald Trump to levy a sharply higher H-1B work visa fee of $100,000 (around ₹90 lakh) has triggered widespread concern across India’s information technology (IT) and IT-enabled services (ITeS) sector. The move is expected to significantly impact major Indian IT firms such as Tata Consultancy Services (TCS), Infosys, Wipro, and Cognizant, which deploy large numbers of skilled Indian professionals to the United States under the H-1B programme.
Below is a detailed breakdown of what the proposal means, why it has been introduced, and how it could reshape the Indian IT industry.
Why H-1B Visas Are Critical for Indian IT Firms
The H-1B visa is a non-immigrant work visa that allows US companies to hire foreign professionals with specialised skills, typically requiring at least a bachelor’s degree. Each year, the US issues 85,000 H-1B visas—65,000 under the general category and 20,000 for applicants with advanced degrees.
Demand far exceeds supply, leading to a lottery-based selection system, in which Indian professionals account for a substantial share of successful applicants. For decades, this system has been the backbone of the global delivery model followed by Indian IT services companies.
Why the US Wants to Increase the Fee
The Trump administration has argued that some IT staffing firms misuse the lottery system by filing multiple applications for the same candidate to improve selection odds. According to this view:
The system is being “spammed”
Less-qualified candidates gain access
Foreign workers accept lower wages, allegedly undercutting American workers
By raising the fee to $100,000, the US aims to ensure that only genuinely high-value, high-skill professionals are sponsored, discouraging bulk filings and protecting domestic wage levels.
Financial Impact on Indian IT Companies
An analysis by Bloomberg News shows that if this fee had been in place between May 2020 and May 2024, the financial burden on Indian IT firms would have been substantial:
Infosys would have paid the fee for over 10,400 new H-1B visas, covering more than 93% of its hires in that period—an added cost of nearly $1 billion (₹9,000 crore).
TCS would have been affected for around 6,500 employees, impacting about 82% of its new H-1B staff.
Cognizant would have faced charges for over 5,600 employees, nearly 89% of its new H-1B hires.
These costs are unlikely to be passed on to clients easily, meaning they would directly hit company margins.
How Have Companies Responded?
Leading IT firms have attempted to reassure investors and clients:
Cognizant said the impact would be limited, citing a significant reduction in its dependence on visa-based staffing in recent years.
Infosys CEO Salil Parekh stated that the company already follows a policy of limited visa sponsorship and does not expect disruption to client services.
Possible Strategic Shifts by IT Firms
To mitigate the impact, companies may adopt several alternatives:
Offshoring and Nearshoring
Expanding delivery from India or nearby countries such as Canada and Mexico instead of the US.
Increased Local Hiring in the US
Prioritising American citizens and green card holders.
Greater Use of Automation and AI
Reducing reliance on large human workforces for repetitive or low-skill tasks.
Focus on High-End Skills
Reserving H-1B visas strictly for niche, high-value roles that justify the cost.
Can the Fee Be Challenged?
The proposal has already faced legal challenges. The US Chamber of Commerce and several state governments have moved courts, arguing that:
The administration lacks the legal authority to impose such a high fee
The move could severely harm US businesses
Historically, several immigration-related measures under the Trump administration have been blocked or overturned by courts. The final outcome will depend on upcoming judicial rulings.
Crisis or Opportunity for Indian IT?
While the proposal poses an immediate challenge, many analysts see potential long-term benefits:
Shift to high-value services such as AI, cloud computing, data analytics, cybersecurity, and digital transformation
Development of domestic talent across Indian cities
Creation of high-quality jobs in India, potentially reducing brain drain.
