 "US visa, H4, H1B")
Increased H-1B visa fees may not have a significant impact on Indian information technology (IT) services companies in the next financial year, but will reduce a bare 10–20 basis points (bps) from their operating margins according to Crisil Intelligence.
For the current financial year, there will be no impact as the H-1B requirements will have already been fulfilled, it added.
"These companies, which had operating margins of around 22 per cent last financial year, are likely to share the incremental cost with clients. The pass-through is estimated at 30–70 per cent," the release said.
Recently, the Donald Trump-led US administration imposed a $100,000 fee on H-1B visas, of which over 70 per cent beneficiaries are Indians.
Reliance on H-1B almost halved
The reliance of IT companies on H-1B visas has been decreasing over the past few years. According to the US Citizenship and Immigration Services (USCIS), between 2017 and 2025, the number of Indian employees on H-1B visas working for TCS, Infosys, Wipro, and HCL Technologies almost halved from 34,507 to 17,997, marking a negative compound annual growth rate of 9 per cent.
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Firms stepping up local hiring
According to Crisil, the trend began in 2018 when the denial rate increased to 24 per cent, leading firms to expand offshore delivery, open nearshore centres, and hire locally in the US, even though the denial rate eased to 3 per cent in 2024.
Visa fee may form 1% of total employee cost
Last financial year, employee costs accounted for 55–57 per cent of sales of India’s IT companies, while visa expenses ranged between 0.02–0.05 per cent of the total employee cost, with H-1B visa fees at $2,000–5,000 per person.
About 35 per cent of the approved H-1B applications from October 2023 to September 2024 were for initial employment. If this share remains constant next financial year, the new fee structure could raise visa costs to 1.0 per cent of total employee cost. If the share is reduced, visa-related costs are expected to remain between 0.3–0.6 per cent of the total employee cost.
US remains top market
According to Crisil, Tier-1 IT companies such as TCS, Infosys, Wipro, and HCL generate 96 per cent of their revenue from international markets, with the US alone accounting for at least 53 per cent.
In FY25, the industry exported $119 billion in services, reflecting its scale in global outsourcing. India remained the top recipient of remittances at $118.7 billion in FY24, about 23 per cent of which came from the US.
"The visa fee hike is likely to reduce both the inflows and the share of the US over the medium term. The visa fee hike is also expected to accelerate offshoring and deter students from considering higher studies in the US," Crisil said.
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