Introduction
A recent move by the United States has sent shockwaves through the technology and outsourcing sectors: President Donald Trump signed a proclamation requiring companies to pay a $100,000 fee per year for each H-1B work visa sponsorship. This unprecedented fee hike – part of a broader immigration crackdown – could deal a significant blow to the tech industry, which relies heavily on skilled workers from countries like India. Indian information technology (IT) and outsourcing firms, in particular, stand to be deeply affected, as they have historically been among the heaviest users of H-1B visas to staff U.S. projects.
India’s IT Firms and the H-1B Visa Dependence
Indian IT services companies have long been intertwined with the H-1B visa program. India consistently accounts for the majority of H-1B visas – about 71% of approved beneficiaries in recent years. In fact, several top H-1B-sponsoring firms are Indian outsourcing giants. Tata Consultancy Services (TCS) was the second-largest H-1B visa beneficiary in 2025 with over 5,500 approvals, behind only Amazon. Infosys and Wipro also rank among the top ten H-1B users.
Indian companies depend on the U.S. market for roughly 60% of their IT export earnings, and they have used H-1B visas to deploy thousands of engineers to American client sites. However, over the past decade, Indian IT firms have reduced their reliance on H-1Bs by over 50%, investing in U.S. hiring, delivery centers, and offshore models. Still, they remain exposed, since many client-facing and specialized roles still require physical presence in the U.S.
Economic Impact: Soaring Costs and Squeezed Competitiveness
The fee increase is staggering. Previously, total government fees for an H-1B petition were in the range of $1,000–$5,000. Now, firms must pay $100,000 per visa, per year. For a standard three-year H-1B, that implies $300,000 in fees per employee.
- Example: An employer sponsoring 10 H-1B workers annually would incur $1 million in extra expenses.
- Indian firms collectively sponsored about 13,400 H-1Bs recently. Under the new rule, their cost burden explodes from roughly $13 million to $1.34 billion — equal to about 10% of combined annual net profits of India’s top five IT firms.
Such ballooning costs will erode profit margins and threaten competitiveness. Investors already reacted: share prices of Infosys, Wipro, and Cognizant fell 2–5% after the announcement. Smaller IT firms and startups
