(NEW YORK, UNITED STATES) President Trump approved an unprecedented $100,000 annual H-1B fee that takes effect on September 21, 2025, setting off immediate shockwaves in global technology markets and sparking warnings from industry body Nasscom about disruptions to current projects. The fee, issued via a presidential proclamation just days before rollout, applies to all new H-1B applications filed on or after the effective date, according to administration statements shared with industry stakeholders. Legal experts expect fast-moving court challenges that could shape both timing and scope.
The market reaction was swift. Indian IT stocks traded in New York slid, with Infosys and Wipro American Depositary Receipts falling as much as 4% during the session. Infosys Ltd (INFY) closed at $16.97, down 3.24%, with a small dip after hours. Cognizant also declined. U.S. megacaps — Alphabet, Microsoft, and Amazon — were more steady, a reflection of their broader revenue bases and stronger pricing power. Investors punished firms with heavier H-1B fee exposure, especially Indian IT services companies that depend on onsite rotations to deliver complex U.S. projects.
The numbers are stark. A firm using 1,000 new H-1B visas a year would face $100 million in extra annual costs. At 5,000 visas, that balloons to $500 million per year. Even for cash-rich companies, those are hard choices. For Indian IT services providers, the pressure is sharper because project staffing models often rely on steady H-1B inflows and frequent redeployments.
A recent Mint analysis estimated the revised fee could erase roughly 10% of FY25 profits at major firms with India roots — TCS, Cognizant, HCLTech, Infosys, and LTIMindtree — if issuance remains unchanged and costs are not passed to clients.
Nasscom and Industry Reaction
Nasscom, which represents India’s technology sector, said the one-day implementation window is unworkable and risks business continuity. Member companies report unfinished client transitions, visa stamping trips in progress, and contract timelines that cannot absorb a sudden six-figure per-visa charge with no grace period.
Firms are weighing emergency staffing shifts and redeployments in the United States 🇺🇸, and expanded nearshoring to Canada 🇨🇦 and Latin America to keep projects on track. According to analysis by VisaVerge.com, the early scramble underscores how much the sector relied on predictable costs and steady visa planning cycles.
The lack of a transition period has created immediate operational and legal uncertainty across the sector.
Policy Details and Immediate Questions
The administration used a presidential proclamation — not an executive order — to impose the new H-1B fee. Officials say the fee is effective for new filings from September 21, 2025.
Key open questions include:
– Whether the rule affects activities tied to existing H-1B workers (e.g., visa stamping after travel or port-of-entry revalidation).
– Whether there will be caps, exemptions, or phase-ins for small employers, research institutions, or nonprofit hospitals.
Early guidance was unclear, prompting calls for formal clarifications. The lack of transition time has confused filing teams preparing petitions and consular steps scheduled this week.
Filing basics (what employers currently use)
Employers continue to prepare submissions for new H-1B hires while awaiting agency instructions on payment mechanics. Baseline forms remain:
- Standard petition:
Form I-129for H-1B classification — see the USCIS page: https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations - Premium processing (optional):
Form I-907— https://www.uscis.gov/i-907 - Consular visa application:
Form DS-160— https://travel.state.gov/content/travel/en/us-visas/visa-information-resources/forms/ds-160-online-nonimmigrant-visa-application.html Form I-129page: https://www.uscis.gov/i-129
Company finance teams are modeling the fee as a direct per-new-H-1B add-on, separate from existing statutory fees and the optional premium processing charge. Early summaries shared by counsel mentioned no exemptions, raising the risk that all new H-1B hires carry the same six-figure charge unless courts or agencies narrow the measure.
Market Fallout and Company Playbooks
Indian IT stocks moved first because of high U.S. exposure. Analysts expect near-term margin compression and possible guidance resets as firms reassess deal pricing. Some vendors have reduced reliance on H-1Bs — in some cases to about 20–50% of North America deployments — but the new H-1B fee may outpace those efforts.
Companies better placed to manage the shock tend to have:
– Larger U.S. onshore workforces,
– Automation of routine tasks,
– Scaled nearshore hubs in Canada and Mexico.
Planned phases of market reaction:
1. Next few days and weeks:
– Expect volatile trading in Indian ADRs and domestic shares.
– Management commentary on pass-through clauses and staffing pivots may calm markets.
2. One to three quarters:
– Watch for earnings guidance changes, regional cost disclosures, and contract repricing.
– Vendors that move faster on local hiring and nearshoring may defend margins better.
3. Tail risk:
– If courts do not halt the rule and agencies collect fees as written, labor costs for visa-heavy models may rise for years, forcing a pricing reset.
– If a court issues a stay or softens the rule, a relief rally could follow.
U.S. Big Tech is less affected in trading for now due to scale and diversified revenue, but analysts warn that enduring, uniform application of the fee would raise unit costs in teams heavy on specialized H-1B hires (e.g., cloud, AI, security).
Legal and Contract Considerations
Legal scholars question whether a presidential proclamation can set a six-figure fee without congressional action. Expected legal challenges will likely test:
– The proclamation’s statutory authority,
– Whether agencies followed required procedures,
– Whether economic harm justifies a nationwide injunction.
Companies are preparing declarations documenting project risks, lost milestones, and potential client penalties tied to the abrupt cost shock.
Contract mechanics will be critical. Many large deals include clauses that allow pass-through of new government taxes and fees, but the open questions are:
– How quickly can vendors reprice?
– Will clients agree to full pass-through for a six-figure per-visa cost?
General counsels are reviewing master services agreements while sales leaders prepare targeted increases tied to delivery towers with heavy visa use.
Practical Steps for Project and Staffing Teams
For project managers and staffing teams, near-term actions include:
- Map all roles relying on new H-1B filings in the next 60–90 days.
- Identify in-country replacements and nearshore coverage for critical paths.
- Alert clients to delivery risks tied to the new H-1B fee and present options (remote work, split teams).
- Escalate deals with pass-through language and fast-track change orders where needed.
Operational adjustments already observed:
– Pausing non-urgent transfers and internal role changes that require new H-1B filings.
– Accelerating local recruitment, campus programs, and mid-career hires who don’t need sponsorship.
– Nearshore centers opening weekend shifts to cover U.S. hours on short notice.
– Asking clients to approve temporary remote delivery until travel plans are reworked.
Implications for Workers and the Broader Policy Message
For individual workers, the immediate changes center on timing, not status. The proclamation targets new applications, not people already in H-1B status. Still, travel plans and stamping trips should be reviewed with counsel until agencies clarify whether the fee touches renewals tied to existing approvals. Many employers will avoid travel that might force consular steps in the near term.
The broader policy message is clear: the administration aims to reduce reliance on foreign professional workers by making new filings far more expensive. That may accelerate shifts toward:
– Local U.S. hiring,
– Increased training,
– Heavier use of nearshore and remote delivery.
But in the short run, clients still want the same outcomes on the same timelines, and the immediate question is who carries the cost.
Key Catalysts to Watch
- Court filings seeking a temporary restraining order or preliminary injunction.
- Any agency FAQs explaining scope, timing, and collection methods for the new H-1B fee.
- Company filings disclosing headcount, visa exposure, and revised cost plans.
- Client acceptance of change orders and pass-through charges.
- Secondary effects, such as a rise in cap-exempt placements or shifts to other visa categories.
For now, the rule’s speed and size dominate the narrative. Markets have started to price in a new cost floor for global IT services, while legal teams race to test the proclamation in court. Whether this becomes a brief shock or a lasting change will depend on judges, agencies, and boardroom decisions made over the next few weeks, not months.
This Article in a Nutshell
The administration announced a $100,000 annual fee for each new H-1B filing, effective September 21, 2025, via presidential proclamation. Markets reacted immediately: Indian IT ADRs fell and analysts forecast margin pressure for visa-heavy vendors. The fee imposes steep incremental costs—$100 million per 1,000 new H-1Bs—pushing firms toward nearshoring, accelerated local hiring, automation, and contract renegotiation. Industry body Nasscom called the one-day implementation window impractical. Key uncertainties include scope (whether renewals or travel-related stamping are affected), exemptions, and agency payment mechanics. Legal challenges are expected and will shape timing and final scope. Companies are auditing upcoming filings, informing clients of risks, and preparing mitigation plans as courts and agencies decide next steps.
