President Donald Trump’s move to charge a $100,000 fee for the new H-1B visa applications has set off far-reaching ripples in India’s $283 billion IT industry. Relying on the U.S. for over half its business, the sector is preparing for increased expenses, business model disruptions, and a critical change of strategy.
Indian IT Companies Experience Abrupt Disruption
India has been the largest beneficiary of the H-1B program in history, with 71% of the visas granted last year going to Indian nationals. The radical fee boost threatens to undermine the decades-old custom of cyclical employees cycling in and out of the U.S. This model has provided IT services to a range of foreign clients, including Apple, Google, JPMorgan, Walmart, and Microsoft.
With onshore recruitment becoming prohibitively expensive, organizations are bound to accelerate offshore delivery centers and expedite local employment of American citizens and permanent residents. Experts warn that this reorganization will retard project timelines, increase operational costs, and reduce adaptability for organizations accustomed to drawing from India’s vast talent pool to meet tight deadlines and changing demands.
Industry Associations and Leaders Raise Concerns
Managers across the entire IT sector anticipate companies significantly limiting cross-border transfers and increasingly relying on offshoring hubs in India, Mexico, and the Philippines. The trend will reshape the industry’s onsite-offshore balance, a characteristic that has defined its global delivery model for decades.
Industry association Nasscom warned that the new visa policy has the potential to ruin America’s innovation hub by warping business continuity and limiting access to technological expertise. Economists also warned that higher costs and uncertainty can discourage investment, with ripple effects that extend along supply chains, client contracts, and even to end customers.
Legal and Operational Uncertainty for Employers
The unexpected move prompted an avalanche of panicky calls to immigration attorneys, with businesses seeking clarification on the scope of the proclamation. Although the White House later clarified that the new charge only affects new applications and renewals, several employers suggested H-1B winners avoid international travel until things stabilize.
Lawyers expect lawsuits challenging the constitutionality of the proclamation, with critics calling the move an overreach that bypasses Congress. While companies gear up for higher costs and difficult decisions on which jobs merit the costly sponsorship fee, potential opportunities for skilled foreign workers who long viewed the H-1B as a steppingstone toward permanent employment may be limited.
Global Capability Centers Gain Ground
Industry experts forecast that the policy will accelerate the growth of Global Capability Centers (GCCs), allowing American businesses to conduct finance, research, and innovation outside of America. India already has over half of the world’s total GCCs, and the industry is likely to surpass $100 billion by 2030 while creating nearly three million jobs.
At the same time, business corporations are on the verge of diversifying through the opening of GCC operations in Canada, Mexico, and Latin America, as well as time zone complementarity and cost-saving markets. This will also expedite the application of automation and artificial intelligence, reduce cross-border talent dependency and restructure the global talent supply chain.
Looking Ahead
As the immigration activists and industry groups prepare to fight the order legally, India’s information technology sector is already reconfiguring its staffing strategies to align with the new costs. Whether the order is upheld on judicial review or not, its immediate impact is prompting global multinationals to rethink the balance between offshore creativity and U.S. market needs.
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