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Trump's H-1B visa crackdown upends Indian IT industry's playbook
Published by Global Banking and Finance Review
Posted on September 21, 2025
5 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 21, 2025
5 min readLast updated: January 21, 2026
Trump's H-1B visa changes impose a $100,000 fee, disrupting Indian IT strategies. This affects US project staffing and may lead to increased offshore work.
By Haripriya Suresh and Sai Ishwarbharath B
BENGALURU (Reuters) -India's $283 billion information technology sector will have to overhaul its decades-old strategy of rotating skilled talent into U.S. projects following U.S. President Donald Trump's move to impose a $100,000 fee for new H-1B visas from Sunday, according to tech veterans, analysts, lawyers and economists.
The sector, which earns about 57% of its total revenue from the U.S. market, has long gained from U.S. work visa programs and the outsourcing of software and business services -- a contentious issue for many Americans who have lost jobs to cheaper workers in India.
India was by far the largest beneficiary of H-1B visas last year, accounting for 71% of approved beneficiaries, while China was a distant second at 11.7%, according to U.S. government data.
Trump's move to reshape the H-1B program will force IT firms with clients such as Apple, JPMorgan Chase, Walmart, Microsoft, Meta and Alphabet's Google to pause onshore rotations, accelerate offshore delivery, and ramp up hiring of U.S. citizens and green card holders, experts said.
AMERICAN DREAM SLIPPING AWAY
"The 'American Dream' for aspiring workers will be tough," Ganesh Natarajan, former CEO of IT outsourcer Zensar Technologies, said, adding that he expected firms to restrict cross-border travel and get more work done out of countries such as India, Mexico and the Philippines.
IT firms Tata Consultancy Services, Infosys, HCLTech, Wipro and Tech Mahindra did not respond to Reuters requests seeking comment.
Industry body Nasscom said the move would "potentially have ripple effects on America's innovation ecosystem" and disrupt business continuity for onshore projects.
"Services exports have finally been dragged into the ongoing global trade and tech war," Emkay Global Chief Economist Madhavi Arora said, adding that it could disrupt the IT sector's onsite-offshore model, pressuring margins, and supply chain.
Most industry watchers expect Trump's move to constrain client-facing roles, hurting IT deal conversion and extending the time taken to scale up tech projects.
"Clients will demand repricing or delay start dates until there is clarity on legal challenges. Some projects will be re-scoped to reduce onshore staffing. Others will shift delivery offshore or near-shore from day one," HFS Research CEO Phil Fersht said.
FUTURE H1-B VISAS FOR CRITICAL ROLES ONLY
Immigration lawyers, who received frantic calls over the weekend due to the chaos and confusion created by Trump's proclamation, in which he accused the IT sector of manipulating the H-1B system, said the new visa fee was steep.
"We expect that companies will become far more selective in deciding which candidates to sponsor, reserving H-1B filings for only the most business-critical roles," Vic Goel, managing partner at U.S. law firm Goel & Anderson said. "This would significantly reduce access to the H-1B program for many skilled foreign nationals and could reshape employer demand."
Before the White House clarified that the order applied only to new applicants and not holders of existing visas or those seeking renewals, companies including Tata Consultancy Services, Eli Lilly, Microsoft, JPMorgan, and Amazon advised employees on H-1B visas to stay put or return to the U.S. before Sunday, according to internal messages seen by Reuters, forcing many workers from India and China to abandon travel plans and rush back.
Many immigration lawyers expect Trump's move to be challenged legally soon.
"We are anticipating that several lawsuits will be immediately forthcoming this week," Alcorn Immigration Law CEO Sophie Alcorn said.
The fresh challenge for the Indian IT sector comes as it awaits clarity on a proposed 25% tax on outsourcing payments and struggles with weak revenue growth in its mainstay U.S. market as clients defer non-essential tech spending amid inflationary pressures and tariff uncertainty.
MOVE TO PROPEL GCC GROWTH
Across the board, industry watchers expect Trump's move to accelerate the growth of U.S. firms' global capability centres (GCCs), which have evolved from low-cost offshore back offices to high-value innovation hubs that support operations, finance, research and development.
"Time zone proximity will accelerate GCCs and resourcing in Canada, Mexico, and Latin America, where talent is stable and cost advantages remain," ISG President and Chief AI officer Steven Hall said. "GCCs in India will also continue to rise with broader capabilities and skills as enterprises shift strategic roles to India."
India, currently home to more than half of the world's GCCs, is projected to host more than 2,200 companies by 2030, with a market size nearing $100 billion and generating up to 2.8 million jobs, according to a Nasscom-Zinnov report released last year.
Silicon Valley-based Constellation Research founder and chairman Ray Wang expects Trump's move to lead to more GCCs in India, more local hiring in the U.S., more pressure to deliver automation and AI at the same time, less outsourcing, fewer H-1B visas and less job mobility.
"We are seeing a new world order on services economics," Wang said.
(Reporting by Haripriya Suresh, Sai Ishwarbharath B, Rishika Sadam, Abhirami G and Urvi Manoj Dugar, Editing by Dhanya Skariachan and Hugh Lawson)
Trump's changes will force IT firms to pause onshore rotations and accelerate offshore delivery, potentially disrupting business continuity for onshore projects.
India accounted for 71% of approved H-1B visa beneficiaries last year, making it the largest beneficiary of the program, which has been crucial for its IT sector.
Many immigration lawyers anticipate that several lawsuits will be filed soon to challenge Trump's proclamation, which they believe creates chaos and confusion in the IT sector.
Industry watchers expect that Trump's move will accelerate the growth of U.S. firms' global capability centres, with a shift towards local hiring in the U.S. and increased automation.
The changes could disrupt America's innovation ecosystem and impact the IT sector's ability to scale tech projects, leading to delays and potential project re-scoping.
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