H-1B visa fee hike to cut Indian IT firms’ margins by just 10-20 bps, revenue to grow 2-4 pc
Indian IT giants like TCS, Infosys, Wipro, and HCL Technologies face a new challenge from the US government’s plan to charge $1 million for fresh H-1B visas starting September 21, 2025. But don’t worry—experts say the hit to their profits won’t be too bad, just a dip of 10 to 20 basis points in operating margins next fiscal year.
These companies, which earned operating margins around 22% last year, plan to shift 30% to 70% of the extra costs to their clients, according to a fresh report from Crisil Intelligence. That means the financial sting could ease as they spread the load.
The broader Indian IT services industry looks set for steady but modest growth. It expects to pull in $143 billion to $145 billion in revenue this fiscal year—a 2% to 4% rise from last year—before things flatten out or stay flat the following year. The H-1B fee change won’t affect existing visa holders or renewals right away, so the immediate impact stays low.
Over the years, Indian IT firms have cut back on relying so heavily on H-1B visas. They’ve boosted offshore operations, set up nearshore centers, and hired more locals in the US to adapt. Government data shows the number of Indian workers on H-1B visas at these top firms nearly halved—from 34,507 in 2017 to 17,997 in 2025.
Employee costs make up 55% to 57% of sales for these companies, and visa expenses have been tiny— just 0.02% to 0.05% of that total. Right now, H-1B fees run $2,000 to $5,000 per person. But if job market trends hold, the new $1 million fee could push visa costs up to 1% of overall employee expenses, ICRA estimates.
These tier-1 players get 96% of their revenue from global markets, with the US driving 53% of that. India, meanwhile, leads the world in receiving remittances, hitting $118.7 billion in fiscal 2024, and about 23% of it flows from the US. As the IT sector navigates these US visa changes, staying agile with local hiring and cost-sharing will be key to keeping growth on track.
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