Indian IT companies are expected to recalibrate their strategies following the sharp increase in H-1B visa fees announced by the US administration. On September 19, President Donald Trump signed an executive order imposing a $100,000 fee for new H-1B visa applications, a dramatic rise from the previous cost of around $1,500.
While this policy could impact Indian IT firms, which have traditionally relied on H-1B visas to deploy skilled workers to the US, a report by Nuvama suggests the overall effect may be limited. Over the past eight years, the sector has reduced its dependence on H-1B visas, giving companies a head start in mitigating the impact of this latest policy change.
To handle the higher costs, firms are expected to explore strategies such as nearshoring, offshoring, and hiring more local talent in the US. Although short-term financial and operational challenges are inevitable, increased offshoring and tapping into cost-effective regions are expected to ease the pressure in the long run.
The report also highlights that the new fee could make H-1B visas financially unviable for many firms. With median salaries for Indian IT workers on H-1B visas ranging from $80,000 to $120,000, an additional $100,000 fee would render the program economically impractical.
As a result, companies may focus more on countries like Canada and Latin America, which share similar time zones with the US, and enhance offshoring to India or other cost-efficient regions. While the industry may experience short-term volatility, it is expected to stabilize as IT firms adapt and discover more efficient ways of doing business.
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