NEW DELHI– Indian IT companies are expected to adapt quickly to the U.S. administration’s sharp increase in H-1B visa fees, relying on a mix of local hiring, offshoring, and nearshoring strategies, according to a new report.
On Sept. 19, President Donald Trump signed an executive order imposing a $100,000 fee for new H-1B visa applications, a massive jump from the current cost of about $1,500. The steep hike poses a direct challenge to Indian IT services firms, which for years used the visa program to send skilled workers to the United States.
But industry analysts say the sector may be better prepared than expected. Data compiled by Nuvama shows Indian IT companies have steadily reduced their dependence on H-1B visas over the past eight years, giving them a head start in cushioning the impact of the latest policy change.
“This shift has given companies a head start in cushioning the effects of the latest policy change,” the report noted.
With the new fee making H-1B visas largely uneconomical — salaries for Indian IT professionals on such visas typically range between $80,000 and $120,000 — firms are expected to avoid using the program altogether. Instead, companies are exploring alternatives that include hiring more U.S.-based workers, renegotiating client contracts to share costs, and expanding nearshore operations in Canada and Latin America, which align with U.S. time zones.
A stronger emphasis on offshoring to India and other cost-efficient hubs is also anticipated. While the report warns of short-term disruptions and financial pressures, it projects that the industry will stabilize as firms adjust to the new environment and adopt more efficient business models. (Source: IANS)
