Indian IT braces for $100,000 H-1B visa fee; firms look to offshoring, local hires to absorb shock - Report

NEW DELHI: Indian IT companies are preparing to cushion the impact of the US administration’s steep hike in H-1B visa fees, with analysts saying the blow, while sharp, is unlikely to be fatal for the sector.

On September 19, President Donald Trump signed an executive order raising the fee for new H-1B applications to $100,000, a staggering jump from the current $1,500. The move is expected to squeeze firms that rely on sending tech talent to the US, though many have already reduced their dependence on such visas.



‘Unviable economics’
A report by Nuvama said most Indian IT companies are unlikely to pay the new fee. With median H-1B salaries in the $80,000–120,000 range, adding another $100,000 would make these roles uneconomical.

Instead, companies are expected to pivot. “We believe Indian IT companies shall mitigate this impact by higher nearshoring/offshoring and/or hiring local talent,” the report noted.

Shifting strategies
Analysts expect multiple workarounds:

• Nearshoring to Canada and Latin America to stay close to US clients.
• Hiring locally in the US to reduce visa dependence.
• Increased offshoring to India and other cost-effective markets.
• Renegotiating contracts to pass some costs back to clients.

Short-term pain, long-term reset
While near-term financial and operational pressure is unavoidable, Nuvama predicts the sector will eventually absorb the shock. “Over the medium to long term, the situation is likely to stabilise as the sector companies discover more ways to do business efficiently,” the report said.

The executive order, however, signals a tougher environment ahead for Indian IT, which will now need to rethink its staffing models even more aggressively.