Proposed $103,265 H-1B Fee Could Put Pressure on Indian IT Companies’ US Staffing Model

New Delhi: The proposed additional fee linked to H-1B visas in the United States could create a new challenge for the business model of Indian IT companies, which often deploy employees from India to work with US-based clients. The US Department of Homeland Security has proposed an additional fee of $103,265 for each cap-subject H-1B petition. The proposal is not yet a final policy and is subject to the applicable public comment process.

For Indian IT companies, the proposed change could be significant because H-1B visas have long been an important link between offshore delivery operations and onsite work for US clients. Companies have used the visa route to deploy employees in the US for client engagement, project management, technical expertise and other specialised roles.

Greater Focus on Local Hiring in the US

Indian IT companies have in recent years taken steps to reduce their dependence on H-1B visas and increase hiring in the United States. Industry body Nasscom has also highlighted a decline in H-1B usage alongside an increase in US-based hiring.

According to an analysis based on available USCIS data, seven major Indian IT companies received 4,573 H-1B approvals for initial employment in fiscal year 2025, around 70% lower than their level in 2015. The shift is being viewed in the context of changes in the industry's staffing model.

Local hiring can help companies maintain a stronger presence in the US market, but it can also increase costs related to salaries, benefits, insurance, compliance and other employment expenses. At the same time, greater use of offshore delivery centres can be effective for certain types of projects, although it may have limitations where local presence, industry knowledge and faster coordination are required.

Potential Impact of the H-1B Fee

If the proposed additional fee is implemented, companies may need to reassess which roles are economically viable for H-1B sponsorship. For highly specialised positions such as cybersecurity specialists, cloud architects, data scientists and senior programme leaders, the additional cost may be easier to justify in some cases.

For routine software maintenance, testing, application support and certain junior-level roles, however, the additional cost could influence staffing decisions. This could encourage companies to use H-1B sponsorship more selectively.

AI and Automation Add Another Dimension

Changes in H-1B policy are being discussed at a time when artificial intelligence and automation are also reshaping parts of the IT industry. Automation is increasingly being used in areas such as testing, infrastructure monitoring, documentation, customer support and code generation.

This does not mean that the need for human workers in the IT sector will disappear. However, some entry-level and repetitive roles could change as companies adopt more AI and automation tools. This may increase the importance of reskilling and the development of technology-focused roles.

Immigration Compliance Remains Important

Companies using the H-1B system are required to comply with rules concerning employee roles, salaries, worksites, supervision and project details. Any inconsistencies in immigration filings can potentially result in additional scrutiny.

Recently, processes related to labour certification applications involving Cognizant Technology Solutions have also been subject to scrutiny by US authorities. The company has denied wrongdoing and said it is cooperating with the inquiry. Any allegations in such matters should therefore not be treated as established facts before the relevant process is completed.

The development highlights the importance of global staffing and immigration compliance as governance issues for IT companies. Businesses may need to maintain close oversight of visa-related records, employee roles and worksite requirements.

Possible Impact on Indian IT Professionals

Changes to the H-1B system could affect more than companies' staffing strategies. Onsite assignments in the US have long formed part of career development and international exposure for many professionals in India's IT sector.

If companies limit expensive visa sponsorship, opportunities for some employees to take up US-based assignments could decline. Businesses may instead prioritise senior specialists and high-value roles, while other work could increasingly be handled through offshore delivery centres.

This could also lead to greater discussion around entry-level hiring and career progression in India. The actual impact, however, will depend on individual companies' staffing policies, their adoption of AI and the final form of US immigration policy.

What Could It Mean for Hyderabad and Other IT Hubs?

Major technology hubs such as Hyderabad have significant exposure to global IT services and international mobility. US-based assignments have also influenced career decisions and international exposure for many technology professionals.

If the H-1B route becomes more expensive or selective, companies may look for a new balance between offshore delivery, local US hiring and automation. The impact on hiring and deployment strategies is likely to vary from company to company.

The Road Ahead for the Indian IT Industry

US immigration policy is outside the control of Indian IT companies, but businesses can adapt their operating models. Possible approaches include increasing local hiring, expanding offshore delivery, adopting AI, reskilling employees and investing in technology products.

The industry will also need to consider how new career pathways can be developed for entry-level employees as AI and automation become more widely adopted. At the same time, strengthening India-based capabilities in areas such as cybersecurity, semiconductor design, deep technology, health-tech, climate-tech and software products could become increasingly relevant.

Conclusion

The proposed additional H-1B fee of $103,265 is not yet a final policy, but it has intensified discussion around the US staffing models and immigration dependence of Indian IT companies. Its eventual impact will depend on whether the proposal is implemented in its current or revised form and how companies balance visa costs, local hiring, offshore delivery and AI-driven automation.