The Trump administration’s extension of a $100,000 fee on new H-1B visa applications through Sept. 21, 2027 is set to increase the cost of serving US clients for India’s IT services firms, with Infosys, Wipro and peers facing a steeper hurdle to placing employees onshore.
Infosys, Wipro Face Higher H-1B Visa Costs
The policy matters because it strikes at one of the industry’s most durable operating models: moving skilled Indian engineers to client sites in the US to win and execute large outsourcing contracts. A six-figure surcharge per new petition makes that staffing channel materially more expensive and could push companies to hire more locally in the US, offshore more work to India or other delivery centers, or absorb some of the cost in margins. For a sector already managing slower discretionary technology spending, the change adds another layer of pressure to pricing and profitability.
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Indian IT companies have long depended on the H-1B route to support high-end consulting, systems integration and transition work for American customers. The extension does not eliminate the visa program, but it raises the economics of using it at the margin, especially for junior and mid-level employees who are often deployed for project ramps and client support. That creates a potential drag on revenue growth if firms are unable to staff projects as efficiently, and on operating margins if they choose to keep the onshore model in place.
Infosys and Wipro, two of the largest US-facing Indian technology services firms, are already trading under pressure. Infosys has fallen to about $10.50 from recent highs near $19.79, while Wipro is down to around $1.64 from $3.00, leaving both well below their 200-day moving averages. On standard technical indicators, both stocks look weak: Infosys’ RSI is near 27, while Wipro’s sits around 33, consistent with persistent selling pressure. The market appears to be discounting a more difficult earnings backdrop for export-driven IT names.
The bigger economic effect may be indirect. Higher visa costs could accelerate a structural shift away from people-intensive offshore models toward automation, artificial intelligence and broader local hiring in the US. That may help firms defend margins over time, but it also raises near-term execution risk and could compress the cost advantage that has underpinned Indian IT services for decades. The policy could also reduce the flow of Indian professionals to the US, affecting remittance-linked income and the broader talent pipeline feeding the industry.
For investors, the key question is not whether Indian IT firms can adapt — they likely can — but how fast and at what cost. Companies with lower dependence on H-1B placements, stronger offshore delivery mixes and higher automation should be better insulated. Those with larger US staffing needs may face margin pressure, slower deal conversion or more muted growth. The next test will come in management commentary on visa dependence, pricing power and hiring plans as the industry recalibrates its US delivery model.
| Entity | Gains | Losses |
|---|---|---|
| US government | ▲More fee revenue | ▼Risk of slower business inflows |
| Indian IT firms with offshore mix | ▲Lower visa dependence | ▼Less impact from fee hike |
| Indian IT firms reliant on US onsite staff | ▲More incentive to localize | ▼Higher costs and margin pressure |
| H-1B applicants and US employers | ▲Greater pressure to hire locally | ▼Higher hiring friction and costs |
