Economic impact of the new H-1B proclamation (US$100,000 annual fee) on Indian IT firms company-wise estimated annual cost and likely business impact
Introduction
The United States has recently announced a new $100,000 annual fee on H-1B visas (for certain categories). The H-1B visa is crucial for Indian IT companies, as it allows them to send skilled engineers to work onsite for U.S. clients.
For decades, this model has powered the growth of Indian IT giants TCS, Infosys, Wipro, HCLTech, and LTIMindtree. But now, this sudden hike in visa fees will create huge additional costs, potentially reducing profit margins and changing how these companies operate.
This report breaks down the impact company-wise, explains the risks, and gives a Gujju Traders perspective on what lies ahead.
Company-wise Impact Analysis
To understand the effect, let’s look at how many H-1B visas each major Indian IT company received in FY25, and how much extra cost this new law adds.
Estimated Additional Costs
| Company | Approx. H-1B Approvals (FY25) | Extra Cost in USD (millions) | Extra Cost in INR (crores) | FY25 Revenue (INR crores) | Cost Impact % of Revenue |
|---|---|---|---|---|---|
| TCS | 5,364 | $536.4 M | ₹4,726 Cr | ₹2,65,886 Cr | ~1.8% |
| Infosys | 2,004 | $200.4 M | ₹1,766 Cr | ₹1,69,857 Cr | ~1.0% |
| HCLTech | 1,728 | $172.8 M | ₹1,522 Cr | ₹1,17,055 Cr | ~1.3% |
| LTIMindtree | 1,807 | $180.7 M | ₹1,592 Cr | ₹38,008 Cr | ~4.2% |
| Wipro (est.) | ~1,500 | $150.0 M | ₹1,321 Cr | ₹89,090 Cr | ~1.5% |
(Conversion rate: $1 = ₹88.1, Approximate values)
What These Numbers Mean
- TCS (Tata Consultancy Services)
- With over 5,000 H-1Bs, TCS will face the biggest absolute hit — more than ₹4,700 crores annually.
- But since TCS is a ₹2.65 lakh crore giant, the impact is only about 1.8% of revenue. Manageable, but margins will slip.
- Infosys
- Around ₹1,700 crore extra cost, or 1% of revenue.
- Infosys has already been reducing H-1B dependence by hiring more Americans, which will soften the blow.
- HCLTech
- About ₹1,500 crore additional cost.
- HCL has previously stated it relies less on H-1Bs compared to peers, so the real impact could be lower than the table shows.
- LTIMindtree
- The most affected in percentage terms: ₹1,600 crore extra cost, almost 4.2% of revenue.
- For a mid-sized IT firm, this is a serious dent, and may affect competitiveness.
- Wipro
- Estimated hit of around ₹1,300 crore, or 1.5% of revenue.
- Wipro will face margin pressure, especially on commoditized projects with thin profitability.
Sector-wide Implications
- Profit Margins Shrink: IT firms generally work on 15–20% margins. Even a 1–2% hit is significant in such a competitive industry.
- Remote Work Rises: Companies will move more work back to India, doing it offshore instead of sending engineers onsite.
- Local Hiring in U.S.: To avoid H-1B costs, Indian IT firms will hire more Americans, increasing salary expenses but reducing visa exposure.
- Contract Re-negotiations: Firms may pass on part of the new cost to U.S. clients, but this depends on bargaining power.
- Smaller Firms Suffer More: Big firms can absorb the hit; mid-sized and smaller companies may lose clients or margins.
Comparison of Impact
| Category | Big IT Giants (TCS, Infosys, HCL) | Mid-tier Firms (LTIMindtree, Mphasis, etc.) |
|---|---|---|
| Revenue Base | Very high (₹1–2.5 lakh crore) | Moderate (₹30–40,000 crore) |
| % Impact | 1–2% of revenue | 3–5% of revenue |
| Survival Ability | Strong – can absorb costs, renegotiate | Weaker – may lose margins, competitiveness |
| Long-term Strategy | More U.S. local hiring + automation | Aggressive offshoring, cost-cutting |
Gujju Traders View
- Short-term Pain: Margins will definitely reduce in the next 2–3 quarters.
- Stock Market Impact: IT stocks may see volatility, especially Infosys, Wipro, and LTIMindtree.
- Adaptation: Over 1–2 years, big firms will adjust by hiring more locals in the U.S. and shifting routine work back to India.
- Winners & Losers:
- Winners → Firms with low H-1B dependency (HCLTech, Accenture-type models).
- Losers → Mid-tier Indian IT firms heavily reliant on onsite deployment (LTIMindtree, Mphasis).
Gujju Punchline
“Amrika na visa na nava niyamo IT sector ma tufaan laavše – mota players sambhāli laavše, pan nana-mota firmo ma margin no maari padše.”
(The new U.S. visa rules will shake the IT sector – big players will manage, but smaller firms will feel a margin squeeze.)