US clarification on H-1B calms tech nerves, but deferred impact feared

The Indian IT industry breathed a lot easier on Sunday after the US government clarified that the H-1B visa application fee hike applies only to new applicants and does not affect the existing visa holders or renewals.

While some industry experts noted that they foresee no immediate adverse impact over the next 6-12 months as the hike takes effect only in the upcoming application cycle, others cautioned that the delay notwithstanding, there will be a deferred impact requiring eventual reassessment of business strategies by the IT companies, if the rule stays.

"For the next six months to one year, there'll be no impact because for last year, they (companies) already filed H-1B petitions and the lottery system will operate.

"It's only for a petition filed for now... If you file a new petition, it takes six months to one year for it to come up," former Infosys CFO and industry veteran Mohandas Pai said.

He added: "So, there's no worry for the next six months to one year, and after that we will see what happens."  Sajai Singh, Partner at JSA Advocates and Solicitors, however, emphasised that while the immediate shock has muted slightly, which seems like a huge relief for now, it is just giving more time for the reality to set in.

"The clarifications tweak the applicability for new H-1B visa applicants, not the existing visa holders or renewals. This means the current H-1B holders can exit and re-enter the US freely without paying the fee, as the fee will apply to the upcoming H-1B lottery cycle.

"However, Indian IT companies that rely heavily on H-1B visas will still face significant cost increases, potentially disrupting business models and revenue streams," Singh said.

Eventually, all this will bring the focus back on hiring local talent in the US to reduce the dependence on H-1B visa holders, Singh said.

"Net-net, there may be a slight delay in the impact. But the impact will be there, requiring reassessment of business strategies. Yes, the immediate shock has slightly diluted, and so it seems like a huge relief. It's just giving more time for the reality to set in," Singh added.

Ganesh Natarajan, Chairman, GTT Data Solutions Ltd and 5F World, said that after the clarifications, it is good that the existing visa holders will not be affected.

The "American Dream" for an aspiring student or first timer, however, will no longer be feasible, he noted.

"Companies in future will restrict cross-border travel and more work will be done through GCCs in countries like India, Mexico and Philippines where talent will be available.

"The current talent model may change substantially if this rule stays. This could benefit countries like India in the long term but it will take a couple of years for the new work and talent model to crystallise," he said.

Noting that all countries will do what is in the interest of their citizens, Natarajan said, "Indians have to recognise that and build careers with that understanding."  White House official's clarification that H-1B visa fee of USD 100,000 would be applicable only to new applicants offered some relief in Indian tech circles.

The clarification came with a lag of a few hours after President Donald Trump signed a proclamation raising the application fee on visas used by companies to hire workers, including from India, to live and work in the US.

In its immediate aftermath, the proclamation set off a frenzied response as nervous companies as well as jittery H-1B holders travelling outside US got worried about the deadline of September 21, leading to scenes of chaos at some airports.

The social media on Saturday was flooded with dramatic videos of Indian tech workers hurriedly disembarking from aircraft, moments after the sudden announcement by the US administration.

Several X users penned posts about flight delays as H-1B techies anxious about US re-entry challenges chose not to leave the US even after boarding their flight; there were those who, worried over field interpretations of the order, changed plans en route India, where they typically head this time of the year for Navratri festivities.

Notably, Indian tech professionals account for bulk of H-1Bs, over 70 per cent plus.

According to the USCIS website, for the 2025 fiscal (data as on June 30, 2025), Amazon topped the list of H-1B visa approvals at 10,044.

In the list of top 10 beneficiaries, TCS (5,505) is at the second spot followed by Microsoft Corp (5,189), Meta (5,123), Apple (4,202), Google (4,181), Cognizant (2,493), JP Morgan Chase (2,440), Walmart (2,390) and Deloitte Consulting (2,353).

The top 20 list includes Infosys (2,004), LTIMindtree (1,807), and HCL America (1,728).

The Congressional mandated pool is 65,0000 such visas every year along with an additional 20,000 visas reserved for those who have earned advanced degrees in the US.