Why the $100K H-1B Fee Hits TCS Harder Than Amazon

(UNITED STATES) President Trump’s new $100,000 H-1B fee on most new petitions, announced on September 19, 2025 and effective September 21, is reshaping hiring plans across the tech sector. The sharpest shock has hit major Indian IT firms that depend on large H-1B cohorts, while U.S. giants with higher wage bands and deeper budgets appear better placed to absorb the cost.

Early market moves reflect this split: shares of Tata Consultancy Services (TCS) fell about 8.9%, and Infosys declined around 6.1% after the announcement, compared with drops of ~4.9% for Amazon and ~1.4% for Microsoft. Investors are betting that the fee will raise costs and reduce flexibility for firms that run high-volume, lower-salary H-1B hiring models.

Why the impact is unequal

At the heart of the unequal impact is simple math around wages and margins. Average H-1B pay estimates:

• TCS: roughly $78,000
• Infosys: roughly $71,000
• Amazon: $143,000
• Microsoft: $141,000

For many Indian IT firms, the one-time $100,000 fee is larger than the annual pay of the workers they place at U.S. client sites. For U.S. tech leaders, the fee is still large but represents a smaller share of total compensation and can be absorbed across higher-margin projects and bigger budgets. This helps explain why markets expect deeper margin pressure on Indian IT firms than on their American counterparts.

Effects on the H‑1B lottery and filing behavior

The rule interacts with the H-1B lottery system in ways that could change outcomes:

• If filings exceed the annual cap, petitions go into a lottery.
• A very high H-1B fee may deter lower-cost, high-volume filers, shrinking the pool of applicants.
• That shrinkage could improve lottery odds for companies that continue to file at scale despite the cost.
• Some large U.S. firms may accept the fee as the price of protecting their pipeline of specialized roles.
• Indian outsourcing companies may file fewer cases if the added cost overwhelms project budgets.

Strategic choices for Indian IT firms

According to VisaVerge.com analysis, the fee forces tough choices for Indian IT providers:

• Pass higher costs to clients (reopen rate negotiations)
• Cut intake (reduce the number of H-1B petitions)
• Rework delivery models to rely less on onshore placements (increase offshore work or automation)

None of these options is easy in a market where clients demand both speed and price control. That is why the market reaction was stronger for TCS and Infosys than for U.S. platform players that operate at higher salary medians.

Sector context and timing

The shock arrives as the sector was already adjusting to tighter client budgets and slower decision cycles. That backdrop magnifies the policy effect.

• A firm that planned to add hundreds of H-1B hires in a year may now face tens of millions of dollars in extra fees.
• For companies built on lean delivery and thin project margins, each petition becomes a direct budget decision affecting revenue forecasts, pricing talks, and hiring plans.

Uncertainty in implementation

The fee’s design creates additional uncertainty. The administration’s announcement applies broadly to most new H-1B petitions, but several details remain unclear:

• How agencies will handle edge cases
• What exemptions, if any, may apply
• Specific uncertainty about people moving from F-1/OPT into H-1B status
• Whether carve-outs for high-need roles will emerge

Companies are cautious about ramping filings without clear guidance on procedures, timing, and potential exceptions.

Important: Until agencies publish implementation guidance, legal and finance teams should assume conservative timelines and budget for worst-case scenarios.

Expected company responses

Firms may adjust footprints and staffing mixes in several ways:

• Speed up hiring in India and other lower-cost hubs to keep work offshore
• Tilt toward onshore delivery with higher billing rates
• Pursue automation to reduce headcount needs on U.S. projects

Boards and clients are already requesting revised plans that reflect higher visa costs. In effect, the fee narrows the cost gap that has underpinned outsourced delivery in the U.S. market.

How U.S. tech leaders see the fee

For U.S. tech leaders paying >$140,000 to H-1B engineers, the calculus differs:

• The fee is a substantial cost but can be spread across long product cycles and larger margins.
• Some firms may view the fee as a defensive moat in the H-1B lottery if it reduces filings from lower-wage competitors.
• Still, finance teams will revisit workforce plans and may shift some roles to other countries if U.S. costs rise too much.

Impact on talent, clients, and local labor markets

Where this leaves talent and clients:

• Workers in the pipeline face extra unpredictability.
• New graduates hoping to move from F-1/OPT to H-1B may find fewer employers willing to sponsor.
• Clients in banking, retail, healthcare, and manufacturing could see higher contract rates, slower onboarding for key roles, or both.
• U.S. regions that benefit from steady H-1B inflows may experience ripple effects if filings pull back.

Company-level planning and timelines

Companies planning spring filing cycles should take these steps:

1. Coordinate closely with immigration counsel and finance teams.
2. Plan internal approvals well in advance given the fee’s size.
3. Track any changes to lottery processes and wage rules that could compound cost impacts.
4. Review general H-1B cap procedures: USCIS H-1B cap overview.

Client negotiations and margin pressure

Indian IT leaders will face difficult client conversations:

• Reopen rate discussions and set expectations for staffing mixes and delivery timelines.
• Some clients, especially in regulated industries, may accept higher onshore prices.
• Others will push to maintain flat costs, prompting providers to move scope offshore or increase automation.

The bottom line: margin pressure is real, and boards will demand plans that protect both win rates and profitability.

Who is most vulnerable?

• Smaller outsourcing firms are likely to feel the greatest squeeze. They lack balance sheets to spread the fee and may depend on a few U.S. clients for most revenue.
• A modest cut in approved H-1B petitions can slow growth or lead to layoffs at these firms.
• Larger firms may recruit from this pool, but only if they can shoulder higher sponsorship costs and pass them to clients.

Human impact

For individual workers, the announcement increases anxiety:

• People who waited years for U.S. roles must now hope employers will still sponsor under the new fee.
• Students on OPT may prioritize employers with stronger budgets.
• Families planning relocations or school transitions may need to adjust timelines.

This is a policy change with real human stakes beyond balance sheets.

What to watch next

Watch two primary gauges in the coming months:

• Filing volumes from major Indian providers
• Public guidance from agencies on potential exceptions or implementation processes

Possible scenarios:

• If filings from high-volume, lower-wage employers drop sharply, lottery odds could shift in favor of higher-paying firms.
• If agencies announce narrow exceptions for urgent roles, some pressure could ease — but the core cost signal will remain.

For now, the $100,000 H-1B fee stands as a blunt tool that reshapes incentives and highlights different global approaches to building and funding U.S. teams.