H1-B Visa Fee Hike to Push Indian IT Companies to Enhance Local Hiring Over the years, Indian and India-centric companies operating in the US have significantly reduced their dependencies on H-1B visas and steadily increased their local hiring

Pursuant to the recent announcement by the US government to implement a one-time fee of USD 100,000 for each new H1-B visa petition, effective 21 September 2025, Indian IT services companies are expected to enhance their local hiring strategy to reduce dependency on such visas.

According to industry body Nasscom, with the fee being applicable from 2026 onward, it gives sufficient time for companies to further step up skilling programs in the US and enhance local hiring. "The industry is spending more than a billion USD on local upskilling and hiring in the US, and the number of local hires has increased tremendously."

Over the years, Indian and India-centric companies operating in the US have significantly reduced their dependencies on H-1B visas and steadily increased their local hiring. As per available data, H-1B issued to the leading India and India centric companies has decreased from 14,792 in 2015 to 10,162 in 2024. "H-1B workers for the top 10 Indian and India centric companies are less than 1 per cent of their entire employee base. Given this trajectory, we anticipate only a marginal impact for the sector," Nasscom said in a statement.

H-1B is high skilled worker mobility and a non-immigrant visa that bridges critical skills gap in the US. Salaries are at par with local hires.

On September 20, 2025, the White House issued a clarification that the measure will not affect current visa holders and will apply as a one-time fee only to fresh petitions. This has helped address the immediate ambiguity surrounding eligibility and timelines. This alleviates concerns on business continuity and uncertainty for H-1B holders that were outside the US.

Nasscom has advocated for predictable and stable skilled talent mobility frameworks, which are critical for sustaining national competitiveness and have long fuelled US innovation and economic growth. Nasscom believes skilled talent mobility will be central to enabling businesses to make forward-looking investment decisions, accelerate research, and strengthen nations' position in the global innovation economy.

IT firm Cyient does not anticipate any material impact on its financials for FY26 and immediate term. "For FY25, the number of Cyient employees deployed on H1B was 6. Cyient's philosophy has always been in building a truly global engineering and technology enterprise to support our diversified portfolio of businesses. We are local in our approach to build talent and global in our outlook, which defines our market leadership and our risk mitigation approach in today's rapidly evolving world," the company said.

According to Aditya Narayan Mishra, MD and CEO, CIEL HR, "This proclamation has caught everyone off guard. We will have to wait and watch if it gets challenged in US courts, because a measure of this scale will hurt their own economy and is unlikely to sustain in its current form. Over the last decade, Indian IT companies have steadily reduced their dependence on H-1B visas, building strong local and nearshore talent pools. Their business models have already evolved to absorb.

"Indian IT firms will not bear such costs and pass on the costs to clients directly or indirectly. This will accelerate alternative talent models. With employers reluctant to commit to the heavy cost of sponsorship, we could see greater reliance on remote contracting, offshore delivery, and gig workers. This may stretch the project implementation timelines of clients as people will not be available locally. For individual professionals, there will be disruption, especially around renewals and mobility, but over time both employees and companies will find new ways of working. The real question is how long this policy can last, given its potential to undermine the competitiveness of the U.S. economy itself," Mishra added.