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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.
"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.
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