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The US government has raised the fee for new H-1B visas to $1 million, the highest ever. Indian IT companies rely on these visas to send skilled workers to the US for client projects. This fee hike will increase costs for sending new employees.

However, the effect on Indian IT services will be limited. Companies will face smaller profits but will keep their business running. Most will pass some costs to clients by adjusting prices slightly.

What Is The New Rule

The new visa fee rule will start on September 21, 2025. It will apply only to new H-1B visa petitions. This means companies will have to pay the higher fee only when they apply for new visas. The rule does not apply to people who already hold H-1B visas. It also does not apply to renewals of existing visas. Because of this, the impact on projects that are already running in the United States will be very small.

The new rule mainly affects new employees whom companies want to send to the US for the first time. Since existing workers and their renewals are not affected, there will be no sudden problem in the current workforce. This is an important point because many projects depend on employees who are already working in the US. Those projects can continue without change.

Effect On Indian IT Companies

In the last financial year, Indian IT exporters reported an average operating margin of 22%. With the new visa fee, margins are expected to fall by about 10 to 20 basis points. This reduction is very small when we look at the big picture. One reason for this is that IT services companies can pass on between 30% to 70% of the higher visa expenses to their clients.

By sharing the extra cost with clients, companies can prevent a big drop in profits. This careful sharing of costs ensures that leading IT services providers remain financially healthy. Clients also benefit because they continue to get stable and efficient IT services without interruption. Our company also follows this balanced approach. We make sure that our IT solutions remain affordable and high-quality even when costs increase.

Indian IT Industry Size And Growth

The Indian IT industry is one of the strongest industries in the world. In the current year, it has generated between $143 and $145 billion in revenue. Growth is positive, but it is slower compared to previous years. The growth rate this year is between 2% and 4% compared to last year. For the coming year, experts expect either very small growth or flat growth. This shows that the industry is entering a careful and cautious period.

Even with this slower growth, the Indian IT industry continues to be very large and very important worldwide. Its size and depth give it strength and resilience. Clients around the world continue to depend on Indian IT services because of the industry’s scale, talent, and reliability. Our company is proud to be part of this strong industry. We bring the same reliability and commitment to our IT solutions that global clients expect from Indian providers.

Why The Impact Is Limited

The new H-1B visa fee will not cause big problems because Indian IT companies rely less on these visas now. In 2017, about 34,507 Indian workers in the US had H-1B visas. By 2025, this number dropped to 17,997, almost half. This shows companies are using fewer H-1B visas.

Indian IT services companies now use more offshore centers, nearshore offices, and local workers in the US. Offshore centers mean work is done from India. Nearshore offices are in nearby countries like Mexico or Canada. Local hiring means hiring people who already live in the US. These ways help companies reduce visa risks and give them more options. Because of this, companies can still provide IT services in the US even if H-1B rules change.

Employee Cost And Visa Expenses

For Indian IT companies, employee costs usually make up 55% to 57% of total sales. This is the largest cost component for the industry. Until now, visa-related spending has been very small. It was only 0.02% to 0.05% of the total employee costs. This made visa costs almost negligible compared to overall expenses.

With the new policy, visa costs could rise and reach up to 1% of total salaries. This is a sharp increase when compared to earlier, but even now, it is still very small compared to the entire cost structure. This means that companies can handle the increase without disturbing efficiency.

In simple words, even with the new visa cost, the share of visa expenses is still very small compared to what companies spend on employee salaries. This is why the new rule will not create a serious financial problem. Our company also manages employee costs carefully. We make sure that our IT solutions remain efficient and cost-effective while absorbing such changes in expenses.

Importance Of The US Market

The US market is very important for Indian IT companies. For the biggest Indian IT services firms, international markets contribute around 96% of their revenue. Out of this, 53% comes from the United States alone. This shows how central the American market is for Indian IT companies.

Apart from IT revenues, the US also plays a major role in remittances. In 2024, India received $118.7 billion as remittances. Out of this, about 23% came from the United States. This is a clear sign of the strong economic ties between the two countries. Because of this relationship, keeping operations stable in the US market is very important.

For IT services providers like our company, the US market is a key focus. We continue to invest in building strong relationships with US clients. We make sure that our services meet the needs of American businesses in terms of quality, speed, and reliability.

What This Means For The IT Sector

The higher H-1B visa fees will add some costs, but the overall effect on Indian IT companies will be small. These companies have changed their business models to rely less on visas. They can also share some of the extra costs with clients in a clear and fair way.

Demand for IT services and IT solutions remains strong worldwide. Clients need help with areas like digital transformation, cloud, software, and data. Our company is ready to provide reliable and cost-effective services. We will continue supporting clients in the US and globally without any problems.