H-1B Visa Fee Hike May Raise Costs, But Indian IT Firms Likely to Adapt

New Delhi, Sep 23 – The recent hike in H-1B visa application fees to $100,000 is unlikely to hurt Indian IT firms much in the short term, a report said. Over the past decade, these companies have reduced their dependence on H-1B visas by hiring more locally and shifting work offshore.

In the medium term, though, higher delivery costs in the US could push companies to rethink their business models. The effect will differ depending on how much business a company has in the US, how many workers it employs onsite, and its reliance on non-local staff.

The report noted that visa-related hurdles in the past usually came from executive orders rather than law changes. While cost pressures are rising, current US growth conditions are not as challenging as in earlier phases.

The bigger impact may start showing in FY27, when new visa petitions cycle through. In response, Indian IT firms are expected to:

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  Move more work offshore

  
  


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  Expand nearshore centres in Canada and Mexico

  
  


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  Buy firms in Europe and Asia-Pacific to diversify

  
  


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  Invest in automation and AI for higher productivity

  
  

This trend could make Global Capability Centres (GCCs) in India more attractive to skilled workers, as onsite roles shrink and clients push for better efficiency.

India’s stock market may see short-term swings, but valuations remain high compared to past levels. IT stocks, however, have already fallen over the past year due to weak demand.

Still, the overall earnings outlook is improving thanks to stronger domestic consumption and a slow rise in private sector investment. The report added that risks like US tariffs remain, but India’s economic fundamentals are solid.

A possible trade deal with the US in late 2025, along with rising domestic demand, could give markets a further boost.