This eases the anxiety of those anticipating a severe blow to Indian IT companies, especially with regard to profits and other business metrics.
H-1B Fee Clarified
The White House has allayed worries about the possible disruption by clarifying that the $100,000 price for H-1B visas would only apply to first applications.
Analysts currently anticipate that the effect on IT businesses will be minimal, since the price will not apply to renewals, re-entry, or current visa holders.
“This is not an annual charge,” White House press secretary Karoline Leavitt said on social media on a Sunday. The price is one-time and exclusive to the petition.
This eases the anxiety of those anticipating a severe blow to Indian IT companies, especially with regard to profits and other business metrics. Given the volume of H-1B visas granted to these businesses, some analysts anticipated a margin compression of up to 7%.
Gen AI Reduces Dependence
According to EIIRTrend creator Pareekh Jain, the explanation helped to ease a lot of the industry’s anxiety. It is status quo if that and their renewals are unaffected.
Additionally, the number of workers needed to complete a project has decreased due to the use of Generative Artificial Intelligence (Gen AI).
Although widespread disruption is improbable, analysts believe that businesses might cover the one-time expense in an emergency for a small number of vital personnel.
Additionally, IT corporations are able to pay one-time costs of $100,000. Not a huge problem,” Jain said, but he pointed out difficulties for students hoping to find employment in the US, who could suddenly have fewer options.
Travel Costs Affect Margins
The tax will mostly impact individuals who are planning to travel in the near future, according to Piyush Pandey, an analyst with brokerage company Centrum.
An employee who is scheduled to leave in the next month, for instance, will be required to pay greater costs. Although there is still much to learn, the effect on the margin might be between 50 and 100 basis points.
“The fact that persons may re-enter because they have withdrawn… “It will not drastically change any of the current business or operational models, but if they need to recruit someone in the future, they will have to do it locally,” Namratha Dharshan, Chief Business Leader-India Research at ISG, told Moneycontrol.
Decreased dependence on H-1B
The findings provide credence to this story of minimal effect. An examination of H-1B allotments for leading Indian IT companies reveals a changing environment.
According to a new report, the H-1B visa environment is changing. For example, since 2022, visa allocations for Wipro, Infosys, and Tata Consultancy Services (TCS) have all decreased.
From 2022 to 2025, TCS, Infosys, and Wipro saw a sharp decrease in visa allocations: TCS by over 45%, Infosys by over 71%, and Wipro by almost 33%.
These companies also said that their reliance on H-1B visas to deploy workers in their primary market, North America, has decreased from 20% to less than 50%.
This implies that businesses are not completely giving up on the initiative. Rather, they are adjusting strategically. Because the price is one-time, it is unlikely to result in the widespread turmoil that was once predicted. Although there are fewer visas for these elite companies overall, the difference is due to a strategy move rather than a catastrophe.
Impact on the industry: Controllable but unequal
According to UBS Global Research, businesses like Cognizant, who depend more heavily on H-1B petitions, would see a 100–150 basis point effect on their operating margins if the charge were solely applied to new petitioners worldwide, while Accenture would be less affected.
Contractor markets may see second-order consequences for staffing companies like ASGN and RHI, who sponsor comparatively few H-1Bs. This suggests that the second-order effect would be comparable for Indian IT staffing companies as well.
Speaking to CNBC-TV18, Sandip Agarwal of Sowilo Investment Managers predicted that if 10,000 additional visas are granted under the new system, the top five Indian IT companies—which together bring in $80 billion in revenue—could be impacted by an estimated $1 billion per year. This would result in a 7% compression on margins.
However, Jain noted that the figures are insignificant in comparison to previous concerns that the price would be applied yearly and to renewals, which would have been “very troublesome.”
There are still legal clouds.
There are still concerns over the move’s durability and legality despite the White House’s statement.
The policy is based on “shaky basis,” according to Phil Fersht, CEO of HFS Research. Instead than using executive orders alone, USCIS sets fees via a cost-based rulemaking procedure. I fully anticipate legal action and an injunction prior to the effective date of September 21. Durability is poor without legislative backing,” he cautioned.
“But the greater picture is the long-term shift: even if this legislation is overturned, it accelerates the industry’s transition to automation, platform-based services, and less dependence on H-1Bs,” he said.
Amrop India’s digital and technology partner, Prashant Yadav, concurred. However, locals will not take its place if it doesn’t. In actuality, there are no talents in the area. Individuals and jobs will thus relocate to other countries.
US labor, remittances, and offshoring
The plan may change recruiting practices, Daniel Low, a partner at the US-based civil litigation company Kotchen & Low LLP, told Moneycontrol. For occupations where the same work can be done overseas, a $100,000 yearly charge would provide a clear financial incentive that would discourage employers from hiring H-1B workers in the US; some of those jobs would most likely be offshored, he added.
He went on to say that although US companies will increasingly hire locally, fewer Indian IT workers in the US might result in lower remittances to India. “Only the most experienced and competent visa workers, who are hard to replace with local talent, would have their fees covered by the company.”
For Indian IT companies, the medium-term effects will be “a mixed bag.”
India’s potential
The suggested modifications may provide new opportunities for India.
The measure may potentially turn into a “defining moment” for the nation, according to Guruprasad Srinivasan, Executive Director & CEO of Quess Corp.
This demonstrates the importance of Indian talent to the United States, since Indians presently account for almost 71 percent of all accepted H-1B visa applications.
According to Srinivasan, “more work is expected to transfer to India as on-site positions in the US grow more expensive, offering larger possibilities and motivating competent workers to establish their careers at home, perhaps reversing decades of brain drain.”
India stands to gain from a stronger workforce, faster innovation, and a more significant position in global technology services, while US companies may have to deal with increasing prices and pressure to reskill domestically.
A more comprehensive discussion of talent flows
The discussion has also rekindled worries about high-skill immigration and research’s future.
Lightspeed Ventures’ Hemant Mohapatra, a previous H-1B holder, cautioned that the regulation would favor large tech companies at the expense of midcaps and smaller businesses. In the near future, this will result in a greater “return to home country,” not just for IT professionals but also for highly qualified PhD researchers. If India does not provide them a profession, it will lose them to other nations,” he said.
“There is no commercial economic value from this decision by Trump,” Yadav said bluntly in his judgment.
Conclusion
The proposed $100,000 tax nevertheless changes the economics of recruiting qualified foreign workers in the US, even if the White House’s explanation has allayed concerns about an immediate, significant disruption.
Each company will probably bear a different share of the cost, with those that depend on H-1Bs being more vulnerable.
The action might boost outsourcing and India’s indigenous talent pool, but the long-term results depend on how fast multinational corporations adjust as well as legal issues.