How Will Indian IT Firms Tackle H-1B Visa Fee Hike?
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Synopsis
The recent hike in H-1B visa fees has prompted Indian IT firms to rethink their strategies. Discover how these companies plan to tackle the challenges posed by this fee increase and what it means for the future of IT services in the US.
Key Takeaways
- The H-1B visa application fee has dramatically increased to $100,000.
- Indian IT firms are expected to adjust their strategies to cope with this change.
- Local hiring and nearshoring are likely to become more prominent.
- The long-term impact on the sector may be mitigated by increased offshoring.
- Most firms may avoid the new fee altogether, making H-1B visas less attractive.
New Delhi, Sep 23 (NationPress) Indian IT firms are anticipated to modify their strategies in response to the recent substantial increase in H-1B visa fees introduced by the US government, according to a report released on Tuesday.
On September 19, US President Donald Trump enacted an executive order that raises the fee for new H-1B visa applications to $100,000, a significant leap from the previous amount of approximately $1,500.
This decision is likely to affect Indian IT companies, which have historically depended on the visa program to deploy skilled professionals to the US.
However, data compiled by Nuvama indicates that the overall effect on Indian IT firms might be minimal, as the industry has progressively diminished its reliance on H-1B visas over the last eight years.
“This transition has provided companies with a head start in mitigating the impacts of the recent policy shift,” the report stated.
Nuvama suggests that firms are likely to address the increased costs through strategies such as nearshoring, offshoring, and hiring more local talent in the US. Although some immediate financial and operational hurdles are unavoidable, increased offshoring is expected to alleviate pressure in the long term.
The report also highlighted that most Indian IT service providers may avoid incurring the new fee entirely, as it renders H-1B visas economically unfeasible.
The average salary for Indian IT professionals on H-1B visas ranges between $80,000 to $120,000, and adding an additional $100,000 fee would make the arrangement financially untenable.
Instead, companies are likely to explore other avenues such as renegotiating contracts with clients to distribute costs, hiring locally in the US, or expanding nearshore operations in countries like Canada and Latin America, which share the same time zone as the US.
A heightened emphasis on offshoring to India or other cost-efficient regions is also anticipated, according to the report.
While the industry may experience volatility in the short term, the situation is expected to stabilize as IT firms adapt to the new landscape and uncover more efficient business practices.
Point of View
It is essential to recognize how the recent changes in US immigration policy can shape the future of Indian IT firms. While challenges exist, the sector's adaptability and innovation pave the way for new opportunities in local and global markets.
NationPress
23/09/2025
Frequently Asked Questions
What is the new fee for H-1B visa applications?
The new fee for H-1B visa applications has been increased to $100,000, a significant rise from the previous amount of around $1,500.
How will Indian IT firms respond to the fee hike?
Indian IT firms are expected to adopt strategies such as local hiring, offshoring, and nearshoring to mitigate the impact of the fee increase.
Will the increase in fees affect the employment of Indian IT workers in the US?
Yes, the increased fees may lead to a reduction in the number of Indian IT workers being employed in the US, as the arrangement becomes more financially unviable.
What alternatives do firms have to H-1B visas?
Firms may explore options like hiring locally in the US, renegotiating contracts with clients to share costs, or expanding operations in nearby countries.
What is the expected long-term impact on the Indian IT sector?
While short-term volatility is anticipated, the long-term outlook suggests that the sector will stabilize as companies find more efficient ways of operating.
