H-1B Visa Fee Hike Impact on Indian IT Companies: Only 0.20%

In a move that has rattled global outsourcing discussions, US President Donald Trump’s decision to levy a steep $100,000 fee on H-1B visas is set to reshape the cost dynamics for Indian technology giants. However, according to Crisil Intelligence, the much-feared blow to profitability will be surprisingly soft.

The agency’s latest note clarifies that the H-1B visa fee hike impact on Indian IT companies will be limited to just 10–20 basis points—equivalent to a marginal 0.20% dent in operating margins for the next fiscal year. For an industry that clocked healthy operating margins of 22% in FY25, the incremental burden appears more of a sting than a slash.

H-1B Visa: Why the Impact Is Limited

Crisil attributes the muted effect to a structural shift that began back in 2018. That year, H-1B visa denial rates spiked to 24%, forcing Indian IT majors to rethink their dependency on US work permits. Since then, companies like TCS, Infosys, Wipro, and HCL Technologies have doubled down on offshore delivery, invested in near-shore centers, and prioritized local hiring in the US. By 2024, denial rates had eased to just 3%, but the recalibrated business model stuck.

Official data reveals that the number of Indian employees working on H-1B visas at the four Tier-1 IT companies has halved from 34,507 in 2017 to just 17,997 in 2025. This steady decline highlights the industry’s conscious detachment from over-reliance on visas.

Sharing the Cost Burden

Crisil also points out that Indian IT firms are unlikely to shoulder the entire fee burden themselves. Companies are expected to pass on 30–70% of the additional costs to their clients, effectively diluting the hit on profitability.

Visa expenses historically formed just 0.02–0.05% of total employee costs, with fees ranging from $2,000 to $5,000 per person. Even under the new structure, where initial employment applications could push costs to nearly 1% of employee expenses, the overall financial effect remains contained.

H-1B Visa: Revenue Growth and Offshore Shift

The Indian IT industry is poised to generate $143–145 billion in FY25 revenues, marking a 2–4% growth from last year. But the road ahead is expected to flatten, with only marginal expansion projected for the following fiscal year.

Despite this, offshore expansion is gaining pace. Tier-1 IT firms generate 96% of their revenues internationally, with the US contributing 53%. Last fiscal alone, India exported $119 billion worth of IT services, reaffirming its global outsourcing clout.

Ripple Effect Beyond IT

Interestingly, the visa fee hike carries implications beyond the IT boardrooms. India remained the world’s top recipient of remittances at $118.7 billion in FY24, nearly 23% of which flowed from the US. Over time, steeper visa costs could dampen these inflows, slightly shrinking India’s remittance share from the American market.

Furthermore, the new fee structure may also deter Indian students from pursuing higher studies in the US, while simultaneously accelerating the industry’s offshoring momentum—strengthening India’s delivery hubs at home and abroad.

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