The new US government directive, requiring H-1B visa petitioners to pay a one-time $100,000 fee to enter, is unlikely to have a major impact on India's large and mid-sized IT services companies, a report released on Monday said.
Equirus fund management company pointed out that the companies can avoid the limitation by increasing dependence on local hiring, subcontracting agreements, or transferring more work offshore.
The order, subject to extension, will remain in force for 12 months from September 21, 2025, and will be effective only against new applicants for visa.
Equirus estimated that if the fee is charged only on new H-1B visa applications, operating margins of big IT players will decline by merely 7 to 14 basis points. If the scope is widened to include new and current H-1B holders abroad, the impact could increase to 26–49 basis points. For mid-cap organizations, the margin squeeze is estimated at 21–39 basis points for fresh applicants and 60–109 basis points if extended to existing visa holders abroad.
The study pointed out that Indian IT vendors have consistently reduced their dependence on on-site H-1B visa personnel during the past six to eight years. Today, these visas represent around 25–35 per cent of the talent at large-cap companies and 30–60 per cent in the case of other participants.
In most cases, the $100,000 tax "is in many cases more than the H1-B visa holders' salary paid by many Indian IT vendors."
"Hence, we believe common sense will prevail in replacing those affected applicants by doing incremental hiring of locals or green card holders or subcontractors and doing offshoring," the report said.
Nevertheless, the fund manager warned that revenue expansion could experience a modest deceleration in the second half of FY26, as adjustments of this magnitude take time and require client approvals in some cases.
As of now, almost 71 per cent of H-1B visa recipients are Indian nationals working in major IT companies like Infosys, Wipro, Cognisant, and Tata Consultancy Services.
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