Indian IT’s US business has run on the same basic mechanic for three decades: staff a project with engineers on H-1B visas, bill the client, rotate talent between India and the client site as needed. A presidential proclamation in September 2025 attached a $100,000 price tag to that mechanic for every new petition — and while the sector had already been quietly reducing its reliance on the visa for years, the fee has forced a much more public reckoning with how much of Indian IT’s US model still depends on it.
What actually changed, and when
On September 19, 2025, a presidential proclamation imposed a $100,000 supplemental fee on H-1B petitions, effective 12:01 a.m. EDT on September 21, 2025, for an initial 12-month period. The fee applies to new H-1B petitions filed after that date — including cap-subject petitions filed in the April-June 2026 window for fiscal year 2027 — but exempts petitions filed before the effective date, same-employer renewals and extensions for people already in H-1B status, and new consular visa stamps tied to petitions filed earlier. In August 2026, the Department of Homeland Security moved to formalize a similar fee — $103,265 — through the standard federal rulemaking process, publishing it in the Federal Register for a 30-day public comment period, which signals the administration intends this to be a durable feature of the system rather than a one-year shock.
Why Indian IT is exposed more than almost any other industry
The numbers explain why this proclamation specifically became a story about Indian IT rather than US tech broadly. USCIS data for fiscal 2025 shows Indian nationals received 283,772 H-1B approvals — nearly 70% of all 406,348 approvals issued that year — with roughly 62% of all approvals going to technology-related positions. The US, in turn, generates as much as 85% of revenue for some Indian IT companies. Put those two facts together and the exposure is structural, not incidental: the fee lands on the specific visa category Indian nationals dominate, in the specific industry that depends most on US revenue.
The industry was already de-risking this, quietly, for years
What’s easy to miss in the fee-shock coverage is that Indian IT firms had been reducing H-1B dependence well before this proclamation. TCS’s own H-1B petition volume fell from 11,212 in FY21 to 7,844 in FY24 — a decline that predates any policy shock and reflects a deliberate shift toward local US hiring, subcontracting to US-based staffing partners, and delivering more work offshore from India rather than onsite. NASSCOM has stated plainly that “the number of H-1B employees from Indian companies have come down substantially over the last decade,” pointing to over $1.1 billion invested in strengthening the US STEM pipeline, partnerships with more than 130 US universities and colleges reaching 2.9 million students, and upskilling of more than 255,000 employees as the mechanism behind that shift — the strategy has been to build a local US workforce pipeline rather than rotate talent in on visas.
What the fee actually costs, in financial terms
Moody’s has estimated that a $100,000-per-petition fee could raise annual operating expenses for large Indian IT companies by $100 million to $250 million — roughly 1% of revenue, with an estimated 100 basis point hit to EBITDA margins. That’s a meaningful but not existential number for companies the scale of TCS or Infosys; it’s a cost line that compounds the margin pressure already coming from AI-driven pricing deflation, rather than an independent shock on its own. The bigger effect may be behavioral rather than purely financial: at $100,000 per new hire, the economics of filing fresh H-1B petitions for entry-to-mid-level roles stop making sense entirely, accelerating a shift that was already underway toward hiring US nationals directly, routing more delivery work offshore, and reserving new H-1B sponsorship for genuinely specialized, senior roles where the fee is a rounding error against the value delivered.
What this means for the offshore side of the business
The structural response the fee incentivizes — do more of the work from India rather than send people onsite on visas — points in the same direction as the domestic AI story this sector has been navigating all year. A model that relies less on onsite H-1B staff and more on offshore delivery centers and Global Capability Centers is, mechanically, a model that needs more of its senior technical decision-making and client-facing capability to live in India rather than in the US. That doesn’t obviously translate into more entry-level hiring in India — the fee doesn’t create new demand, it just changes where existing demand gets fulfilled from — but it does reinforce the broader pattern already visible in 2026’s data: growth concentrating in higher-skill, India-based roles at GCCs and offshore delivery hubs, while the traditional onsite-heavy staffing model that built the industry keeps shrinking.
Where to check what’s actually being hired for
Because a shift like this shows up in hiring patterns before it shows up in quarterly commentary, checking current postings directly is a useful way to see whether roles are actually being advertised as offshore/India-based versus onsite-US. Chuno is an India focused job-discovery platform covering current Indian openings, with filters for software engineering, product, and specialized technical roles. The website is useful for tracking whether India-based hiring is picking up the slack as onsite US hiring gets more expensive.
The bottom line
The $100,000 H-1B fee is a real cost and a real disruption to a staffing model Indian IT has used for decades, but it’s landing on an industry that had already spent years reducing its reliance on that exact model — through local US hiring, university partnerships, and a steady, multi-year decline in H-1B petition volume at firms like TCS. The fee is less likely to be the event that forces a change in direction than an accelerant on a shift that was already underway: less onsite, visa-dependent staffing; more offshore and India-based delivery; and a US business model built increasingly around fewer, more senior, harder-to-replace people rather than large rotating benches of visa-sponsored engineers.
Sources:
National Law Review — H-1B $100,000 Fee Proclamation, key facts and dates
Outlook Business — $103,265 H-1B fee proposal and Indian IT exposure
Business Standard — USCIS FY25 H-1B approval data for India
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