H1B visa fee hike may shave off a mere 10-20 bps margin of Indian IT firms, as cost pass through likely: Crisil
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U.S. govt has raised the annual H-1B visa application fee from $1,000 to $100,000 per applicant | Credits: Shutterstock
H1B visa fee hike may shave off a mere 10-20 bps margin of Indian IT firms, as cost pass through likely: Crisil
The recent H1B visa fee hike by the US is expected to have a minimal impact on Indian IT firms, with only a 10-20 basis point reduction in operating margins. Crisil notes that these companies are likely to pass on 30-70% of the additional costs to clients, mitigating the financial impact.
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Crisil notes that these companies are likely to pass on 30-70% of the additional costs to clients, mitigating the financial impact.
U.S. govt has raised the annual H-1B visa application fee from $1,000 to $100,000 per applicant | Credits: Shutterstock
Donald Trump administration's new dictat on the H1B visa will have a miniscule impact on the Indian information technology companies as they may opt to pass through the incremental costs, said Crisil today.
"The US decision to impose a $100,000 fee on new H1-B visas for foreign workers will snip just 10-20 basis points from the operating margins of Indian information technology (IT) services companies next fiscal," said Crisil in a note today.
"These companies, which had operating margins of 22% last fiscal, are likely to share the incremental cost with clients. The pass-through is estimated at 30-70%," it said.
It, however, pointed out that the reliance of IT companies on H-1B visas has been reducing over the past few years. "The trend began in 2018 when the denial rate increased to 24%, leading firms to expand offshore delivery, open nearshore centres and hire locally in the US, even though the denial rate eased to 3% in 2024," it added.
"According to the US Citizenship and Immigration Services (USCIS), between 2017 and 2025, the number of Indian employees on H-1B visas working for TCS, Infosys, Wipro and HCL Technologies almost halved from 34,507 to 17,997, marking a negative compound annual growth rate of 9%," Crisil said in the note.
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"For the current fiscal, there will be no impact as the H1-B requirements will have been fulfilled by now," it said.
It may be noted that the visa fee enhancement, effective from September 21, 2025, exempts existing H1B visa holders and renewals.
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"India’s IT services industry is expected to reel in $143-145 billion this fiscal, marking a revenue growth of 2-4% over last fiscal. Next fiscal, growth is expected to be only marginal or flat," the Crisil note said.
"According to the USCIS, between October 2023 and September 2024, total H1-B visas issued for four IT companies, which account for ~50% of the industry revenue, stood at 34,507. Of this, 35% was for initial employment and 65% for continuing employment. The share of initial employment is expected to decline over the medium term," it added.