H-1B fee hike unlikely to impact Indian IT as top firms reduce dependency

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Top Indian information technology (IT) services companies are increasingly reducing their reliance on H-1B visas, even as US President Donald Trump raised the visa fee to $100,000 on September 20.

Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra now have between 20 percent and less than 50 percent dependency on H-1B visas to deploy workforce in North America.

H-1B visas allow US firms to hire foreign workers in specialty fields such as STEM and IT.

Moreover, approved H-1B petitions for the top seven Indian IT firms dropped 56 percent between FY15 and FY23 to 6,700. Companies such as Infosys and TCS now employ over 50 percent local staff in the US, reducing visa reliance.

Large firms have pivoted to local hiring, US delivery centres, subcontracting, and offshore delivery.

Reducing reliance on visas

TCS, which earns nearly half its revenue from North America, hires more than 50 percent of its US workforce locally. Chief Executive Officer K Krithivasan told Moneycontrol earlier in January that in any given year, India’s largest IT services company gets about 3,000 to 4,000 H-1B visas. “It's a small number in the overall scheme. If there’s a decrease in H-1B availability, we can compensate or move work to India.”

TCS' nearest rival, Infosys, has similarly cut dependence on H-1B visas, with over 60 percent of its US workforce now local. CFO Jayesh Sanghrajka said their on-site H-1B mix has dropped from roughly 30 percent to 24 percent in FY25.

Also, read: Dependence on H1-B visas low, over 60% of US workers local, says Infosys

HCLTech and Wipro have the lowest reliance at 20 percent, with nearly 80 percent of their US teams hired locally. HCLTech’s Chief People Officer Ramachandran Sundararajan said, “The number of H-1Bs we go through annually ranges between 500 and 1,000 at most.”

Wipro CEO Srinivas Pallia, earlier in January, said that the company has a strong H-1B inventory and is positioned to meet US demand if required.

Tech Mahindra also maintains low dependency, with only 30 percent of its US workforce on H-1B visas. CEO Mohit Joshi, in January, highlighted that the company has built large local teams and near-shore delivery centers, keeping overall visa reliance below 30 percent.

Visa demand remains strong

Despite this reduced dependency, H-1B visa applications continue to rise.

USCIS data shows that 2024 saw a 3.1 percent increase in applications, a 4 percent increase in approvals, and a 32.5 percent drop in denials compared to 2023. The approval rate hit 98.4 percent, the highest since 2021, according to staffing firm Xpheno’s co-founder Kamal Karanth.

Krishna Vij, business head-IT staffing at TeamLease Digital, attributed the demand to global digital transformation, AI, cloud computing, cybersecurity, and ongoing US STEM skill gaps.

Bigger hit for US Big Tech

Ironically, the H-1B programme’s biggest users today are not Indian outsourcing firms but American tech majors. In FY24, the top five US firms together secured nearly 28,000 approvals, with one e-commerce giant alone topping the list at 10,000 approvals in FY2025.

These firms use H-1Bs largely for specialised, high-paying roles such as AI engineers and data scientists, reflecting persistent talent shortages in the US.

Pareek Jain of EIIRTrend believes that the $100,000 H-1B fee will cause short-term disruption and margin pressure for Indian IT. While alternatives like local hiring and subcontracting still rely on H-1Bs, the medium-term outlook points to stabilisation through offshoring, nearshoring, GCCs, and AI adoption. “Agile companies are expected to fare better,” Jain wrote on X.

Also, read: Why Sriram Krishnan’s White House entry shifted focus to immigrant work visa