Nasscom Warns Trump H-1B Changes Hit Small Indian IT Firms

(UNITED STATES) — NASSCOM warned on Thursday that the Trump administration’s new H‑1B visa selection policy, coupled with an added $100,000 per‑visa charge and tougher scrutiny, will hit small and mid‑sized Indian IT companies the hardest by sharply cutting their odds of securing visas and driving up costs.

Calling the combined impact “crushing,” the Indian technology industry body said the new weighted selection approach will tilt the system toward higher‑paid, more senior roles, leaving firms that rely on larger numbers of early‑career and mid‑level hires at a disadvantage.

Why the change matters to Indian IT services firms

The shift matters because many Indian IT services companies staff U.S. client projects with teams that often include entry‑level talent. That model depends on:

• Volume placements of early‑career and mid‑level workers
• Predictable access to H‑1B beneficiaries to meet client timelines

Under the new approach, those predictable volume placements are at risk.

“Crushing” — NASSCOM’s description of the combined impact of weighted selection, the per‑visa charge, and tougher scrutiny.

Quick facts: weighted selection, fee, timeline, ruling

Weighted selection entries

Top wage bracket = 4 entries; Next wage bracket = 3 entries

Registrations tied to higher wage brackets and higher qualifications receive multiple entries, favoring higher‑paid candidates/employers.

Added per‑visa charge

$100,000

Imposed by Presidential Proclamation on Sept. 19, 2025.

Effective window (applies to FY2027)

Feb. 26–27, 2026

DHS scheduled the rule to take effect in late February 2026 and to apply to the FY2027 cap season; cap registrations begin Feb. 2026.

Court ruling upholding fee

Dec. 23, 2025 — Judge Beryl A. Howell

Judge Beryl A. Howell upheld the $100,000 charge in Chamber of Commerce of the USA v. U.S. Department of Homeland Security, No. 1:25‑cv‑03675 (D.D.C. Dec. 23, 2025).

What DHS changed: weighted selection rule

• The Department of Homeland Security finalized a weighted selection rule to replace the random H‑1B lottery.
• Registrations tied to higher wage brackets and higher qualifications receive multiple entries, increasing their odds.
• Under the described structure:
  • Top wage bracket receives 4 entries
  • Next wage bracket receives 3 entries
• The shift therefore favors higher‑paid candidates and employers offering higher wages.

Effective date and timing

• DHS scheduled the rule to take effect in late February 2026 and to apply to the FY2027 cap season.
• Coverage placed the effective window at Feb. 26–27, 2026, aligning with the administration’s timing for cap registrations beginning Feb. 2026.
• Because of that timing, employers have a narrow window to reassess pay scales, role seniority, and onshore/offshore staffing mixes before registrations begin.

The additional $100,000 charge

• President Trump issued a Presidential Proclamation titled “Restriction on Entry of Certain Nonimmigrant Workers” on Sept. 19, 2025, imposing an additional $100,000 charge on certain H‑1B petitions for workers outside the United States.
• A federal judge in Washington upheld that fee this week, rejecting a challenge brought by business groups.
  • Judge Beryl A. Howell of the U.S. District Court for the District of Columbia upheld the charge in Chamber of Commerce of the USA v. U.S. Department of Homeland Security, No. 1:25‑cv‑03675 (D.D.C. Dec. 23, 2025).
• The ruling reinforced the administration’s ability to keep the fee even as broader legal and policy objections continue.

Why NASSCOM says small and mid‑sized firms are worst hit

NASSCOM’s arguments focus on the interaction of two changes — weighted selection and the $100,000 fee — rather than either in isolation:

• Smaller and mid‑sized firms typically:
  • Recruit less‑senior workers at lower wage tiers
  • Lack the pricing power, margins, or scale to absorb a six‑figure per‑visa charge
• Under the weighted model, additional entries favor employers who offer high wages, improving their odds significantly.
• Registrations tied to lower wage tiers receive fewer entries, reducing selection probability for the roles most small firms sponsor.
• The $100,000 fee makes sponsoring workers from abroad dramatically more expensive per hire.

Competitive and operational implications

• The updated model creates a steeper competitive gradient among employers: those able to offer the highest wages gain more entries per registration.
• NASSCOM also pointed to tougher scrutiny of petitions and beneficiaries, adding uncertainty and additional compliance costs.
• The administration frames the changes as measures to “protect American wages and prevent misuse” of the H‑1B program.
• Opponents — including industry groups, universities, and trade associations — argue the measures will harm U.S. businesses and innovation and have pursued multiple legal challenges (some still ongoing despite the D.C. decision).

Practical impacts for staffing and project planning

• For Indian IT services companies that depend on staffing flexibility:
  • A lower‑wage, early‑career placement can become a lower‑probability, higher‑cost bet.
  • The combination forces difficult trade‑offs about which roles to sponsor and what wages to offer.
• Clients and vendors may see changed planning calculus because visa uncertainty affects staffing timelines for projects requiring U.S.‑based work.
• NASSCOM warns the framework is not a marginal policy adjustment but a structural shift that changes who is likely to win H‑1B slots.

Broader stakes and responses

• The administration’s package has become a focal point for business groups arguing the changes will constrain hiring and disrupt staffing models across sectors that use H‑1B.
• The White House maintains the changes are aimed at protecting wages.
• NASSCOM highlights the international dimension: Indian nationals represent the largest share of H‑1B beneficiaries, so these rules and fees are especially consequential for Indian IT firms and workers.

Key facts at a glance

Takeaway

NASSCOM’s core message: the interaction of the weighted selection rule, the $100,000 per‑visa charge, and increased scrutiny will disproportionately disadvantage small and mid‑sized Indian IT services firms that rely on hiring early‑career and mid‑level H‑1B workers. As the late‑February effective date approaches, the industry group urges recognition that this is a structural change affecting who will realistically be able to access H‑1B slots.