US President Donald Trump has signed an order raising the annual fee for H-1B visas to $100,000. The ruling will significantly impact Indian IT firms, which continue to be one of the largest sponsors of H-1B visas. Interestingly, US tech giants Tesla and NVIDIA, among others, will also face the consequence. 

Coming back to their Indian counterparts, TCS, Infosys, Wipro, HCLTech, Cognizant, and LTIMindtree sponsored 13,396 visas in FY25. The latest decision would lead to an increase in their annual visa costs from approximately 13.4 million to approximately 1.34 billion.

According to market analysts, Indian IT stocks are expected to be pressured once trading resumes on Monday. After the announcement, Cognizant shares on Nasdaq dropped 4.75%, and Infosys on NYSE dropped 3.40%. Analysts observe that the extra cost may have a direct impact on profitability levels because the firms are using H-1B to undertake projects in the United States.

US Tech Giants Also Affected by Visa Fee Hike

Indian IT firms are not the only beneficiaries of the new visa fee. Large US technology firms like Amazon, Google, Meta, Apple, Tesla, and NVIDIA also rely on H-1B workers, most of whom are Indians. Companies may experience a significant increase in employment expenses, and recruitment policies are likely to be changed to focus on senior positions.

Mid- and junior-level recruitment may experience significant reductions, particularly among mid-size IT firms and startups that are unable to bear the increased costs. This market, observers note, will cause more jobs to be offshored to offshore locales, creating an off-balancing effect of talent within the US. Moreover, the cost of inputs may increase, decreasing operating margins and making companies less competitive.

Also Read: Big Tech Companies Face Scrutiny Over H-1B Hiring Practices Amid Layoffs

Market Reactions and Outlook

According to the analysts, the policy change is meant to stimulate the employment of American workers. Nevertheless, substituting foreign staff members with domestic workers can further raise the wage bill. Analysts state that Indian engineers are still very cost-effective compared to US engineers, and the increase in fees would interfere with project delivery schedules.

Concerns were already expressed in the stock markets. When Dalal Street reopens, Indian IT shares will likely face selling pressure, and Nasdaq participants such as Tesla stock and NVIDIA shares will also be negatively impacted. The broader perspective suggests that companies on both sides will need to reassess their workforce policies under the new visa regime.