H-1B Fee Surge: How India’s IT Sector Can Survive the Blow

(UNITED STATES) The United States 🇺🇸 has stunned the India IT sector with an extraordinary visa hike: effective September 21, 2025, the fee to file an H-1B visa application rises to USD 100,000 per petition, up from the previous range of USD 1,500–4,000. The scale and speed of this change—nearly 70 times higher than the earlier bracket—signal a sharp policy turn under President Trump aimed at clamping down on what the administration describes as program “abuses,” including alleged displacement of American workers.

Indian technology firms—especially small and mid-sized outsourcers that depend on the H-1B visa to place engineers at client sites in the United States—now face a direct shock to their business models, contract pricing, and staffing plans. With the U.S. market accounting for more than half of India’s technology exports, the policy shift is already prompting emergency reviews in boardrooms from Bengaluru to Pune.

Immediate scope and questions

The fee applies to every H-1B petition filed on or after September 21. Yet the administration’s proclamation leaves major questions unanswered:

• It does not define “abuse” with precision.
• It does not spell out exemptions or carve-outs.
• Ambiguity has triggered confusion across legal, HR, and finance teams in Indian firms.

This uncertainty forces companies to decide whether to delay filings, pull back from the U.S. 🇺🇸 market, or absorb the cost and risk. According to analysis by VisaVerge.com, the lack of detailed guidance is as disruptive as the cost itself, because companies cannot model outcomes confidently or plan deployments predictably.

Scale of the impact

At stake is a huge slice of India’s export engine:

• The U.S. market represents over 50% of India’s technology exports.
• That export book has reached around USD 224 billion in recent years.
• The H-1B visa has long been the workhorse for onsite consulting and implementation roles tied to U.S. clients.

For a mid-sized firm planning to file dozens—or hundreds—of petitions, the filing bill alone could vault from the low millions into the tens of millions of dollars before salary, travel, or compliance costs are counted.

Who can absorb the shock?

• Large tech giants with extensive U.S. footprints (cloud, e-commerce, enterprise platforms) may be better placed to bear the cost.
• Smaller Indian consultancies face immediate friction—many are pausing U.S. hires or freezing transfers while reassessing budgets and renegotiating billing.
• The chilling effect is most acute at the mid-career level, where U.S. assignments fuel career progression.

Government rationale and data context

The administration frames the fee spike as a measure to curb misuse—pointing to cases where outsourcing-heavy employers allegedly undercut wages or replaced U.S. workers. But the debate is complex:

• Government wage data show H-1B workers earned a median pay of about USD 108,000 in 2021, above the U.S. median of USD 45,760.
• This suggests the H-1B cohort is not monolithic: many specialized roles pay far above typical U.S. levels.
• The order’s thrust is clear: by pricing filings high, the government expects fewer petitions, fewer rotations, and hypothetically more openings for domestic hiring.

The measure also aligns with a broader push to tighten access to certain nonimmigrant worker categories, with a promise to review implementation within 30 days after the next H-1B lottery.

Immediate operational responses

For Indian firms running onsite-offshore delivery models, the jolt lands at a delicate moment—macroeconomic caution among U.S. clients has already delayed some contracts. Decisions now include:

• Who pays the fee: company, client, or worker?
  • Shifting to customers may be difficult if price clauses are locked.
  • Absorbing internally strains margins.
  • Passing to employees risks morale and retention.

Policy change and immediate effects

Legal and mobility teams are triaging active and planned filings. Key points:

• The rule applies to filings after the effective date—well-advanced moves could stall if paperwork isn’t lodged.
• Companies are assessing remote delivery from India or nearshore centers across the Americas.
• Alternate visas (L-1, O-1) are being considered, but they have narrower eligibility and longer clearance times.

Business leaders are re-running revenue forecasts to measure exposure if U.S. activity slows. Transformation projects—core banking migrations, ERP rollouts, large cloud shifts—are most exposed. Firms may reduce onsite engineers per project and rely more on offshore teams for build/test phases, but this requires:

• Stronger governance
• Time-zone management
• Client expectation recalibration

The policy text’s fuzzy language on “abuse” and exemptions compounds uncertainty—firms fear flagged filings, retroactive penalties, and public compliance disputes. Some may wait for court challenges or agency guidance; others will proceed cautiously, prioritizing essential roles.

U.S. agencies will also face legal scrutiny. Industry bodies are likely to argue the jump exceeds reasonable cost recovery and acts as a barrier rather than a processing fee. Even if litigation moves fast, injunctions aren’t guaranteed and court timelines vary.

Ripple effects for companies and workers

The human impact is stark:

• Thousands of engineers and consultants on U.S. projects could face redeployment to India or other regions.
• Mid-relocation plans and family logistics (schools, housing, spouses’ jobs) may be disrupted.
• Mid-career specialists who rely on U.S. rotations for career progression are most affected.

Companies are exploring several paths to blunt the shock:

1. Remote-first delivery from India or offshore hubs
   • Reduces spend on onsite roles and exposure to the fee.
   • Challenges: client buy-in for onsite kickoffs, governance, and coordination.
2. Alternate visa categories (L-1, O-1)
   • Fit narrow senior or exceptional cases; not broad substitutes.
3. Nearshore delivery in the Americas
   • Provides time-zone benefits without U.S. visas.
   • Requires investment in local compliance, infrastructure, and talent pipelines.
4. Strategic reorganization
   • Keep critical client-facing leads in the U.S., shift design/R&D/program management to India.
   • Lowers filing volume but changes client perception and risks attrition.
5. Selective consolidation
   • Partnerships/mergers to spread compliance costs and create scale.
   • Deal-making is risky in a volatile policy environment.
6. Collective advocacy and legal action
   • Industry bodies like NASSCOM may seek relief, phased rollouts, or exemptions.
   • Court challenges could delay or reshape implementation, but timelines are uncertain.

Inside many firms, hiring managers have already slowed U.S.-linked requisitions. Some providers reportedly froze transfers the day the fee took effect. For projects in flight, companies are renegotiating staffing models—shifting documentation, automation, and testing offshore. Highly regulated sectors (healthcare, financial services) may still insist on onsite personnel for data-sensitive or compliance work.

Strategic and long-term shifts

If the fee persists, India’s tech export mix could shift toward:

• Remote-heavy delivery
• Product and IP-led growth
• Platform work, managed services, and AI-driven automation deliverable from India

Potential government responses in India may include:

• Incentives for local product development
• Funding for research labs
• Partnerships with universities to build talent pipelines (AI, cybersecurity, cloud reliability)

These transitions take years, not months.

The policy debate: nuance and the blunt instrument

• The share of IT workers in the H-1B pool has risen from about a third two decades ago to well over half today.
• Supporters argue some outsourcing uses hold down wages or limit U.S. opportunities.
• Opponents say H-1B professionals fill acute skill gaps and often earn well above U.S. medians.

Both perspectives can be valid in different market corners. The new fee is a blunt instrument that does not distinguish between high-wage/high-skill roles and lower-wage placements.

Practical questions companies face now

• If a company must file 50 petitions for a U.S. retail modernization, can it afford an added USD 5 million in filing fees?
• Will clients accept reduced onsite headcount?
• Can sensitive discovery or data work be done through secure telepresence and controlled data rooms?

Decisions must be made now, not after a 30-day policy review. Many firms with thin margins may decline U.S. work requiring onsite presence and shift focus to Europe, Middle East, ASEAN, or Africa—a diversification some had already begun.

Contract and market effects

• Legal teams are scanning master service agreements for change-in-law clauses and cost-sharing options.
• U.S. procurement heads are pushing to hold pricing steady.
• Some deals may be re-scoped to favor offshore delivery; others may go to competitors with large U.S. citizen/permanent resident benches.

This could reshuffle market share, advantaging firms with deeper U.S. hiring over India-first models.

Practical mitigation steps (what firms can do now)

• Map all active and planned U.S. roles; categorize by criticality, revenue impact, and regulatory sensitivity.
• Re-run revenue and margin forecasts with high/medium/low U.S. deployment scenarios.
• Audit visa portfolios to flag roles that might qualify for L-1 or O-1.
• Rework statements of work to support remote build/test/run phases; schedule limited onsite windows for crucial workshops.
• Strengthen pipelines in Europe, Middle East, ASEAN, Africa.
• Coordinate with industry bodies to request relief, phase-ins, or exceptions for high-wage/high-skill roles.
• Track court filings closely; if a stay emerges, be ready with a prioritized list of petitions.

These steps won’t erase the cost shock but can reduce immediate revenue hits and protect critical client relationships. Over time:

• Larger providers may absorb fees for select roles—preserving U.S. presence for leadership, architecture, and program control.
• Smaller firms may struggle, accelerating consolidation through alliances or acquisitions.

Cultural and talent implications

For two decades, U.S. rotations were a rite of passage for many Indian engineers—higher pay, client exposure, career milestones. The visa hike breaks that promise for many.

Companies will need new retention tools:

• Accelerated leadership tracks
• Premium pay for complex offshore roles
• Funded certifications in AI, cybersecurity, platform engineering

Done well, these measures can retain talent; done poorly, top performers will migrate to firms with deeper U.S. resources.

Impact on U.S. clients

• Some clients welcome the change, hoping it opens domestic jobs.
• Others worry about slowdowns in projects that depend on scarce skills.
• Expect hybrid setups: a small onsite team anchors relationships while bulk engineering stays offshore.
• Expect tighter service-level enforcement and more automation investment.

Legal outlook and next steps

• The policy may face U.S. court challenges arguing the fee is a barrier inconsistent with statutory intent and far beyond cost recovery.
• Worker groups may be split in their views.
• The administration has promised a review within 30 days after the next H-1B lottery, but firms must plan as if the fee stands.

Final assessment

The visa hike is a structural shock to a global collaboration channel. If it endures, the India IT sector will likely:

• Shift toward remote-first delivery
• Emphasize product/IP work
• Focus on markets beyond the United States

Winners will be firms with diversified client portfolios, strong remote delivery playbooks, and the financial capacity to file selectively despite the fee. Smaller players must find niches, partner with larger firms, or push for policy relief.

The H-1B visa is more than paperwork—it’s a pathway to complex work, higher pay, and career growth for many Indian families. The USD 100,000 filing fee does not erase the need for specialized talent in the U.S., but it forces a hard re-evaluation: when is onsite presence truly essential, and when can work be rebuilt for remote execution?

Key takeaway: The visa hike is real and immediate. Companies must act now—revising contracts, rebalancing teams, and refocusing markets—while monitoring legal and policy developments that could change the landscape.

For the core legal standard that remains in place, see the USCIS H-1B program page.