A new US policy is sending shockwaves through the global IT landscape. Indian giants Tata Consultancy Services and Infosys are bracing for a severe financial blow. The rule imposes a massive $100,000 supplemental fee on certain new H-1B visa petitions.
The fee targets skilled workers entering the US from abroad, especially those needing consular processing. The Trump administration introduced it via a presidential proclamation in September. Officials frame it as a move to curb program abuses and prioritize American jobs.
For decades, the H-1B visa has been a cornerstone of India’s IT outsourcing model. Companies like TCS and Infosys built their success on placing engineers at US client sites. This steep new fee threatens to make that approach prohibitively expensive overnight.
The numbers are staggering. A Bloomberg analysis of recent visa data reveals the scale. Had the fee been active from 2020 to 2024, over 93% of Infosys’s new H-1B workers would have been charged.
That’s more than 10,400 individuals. For Infosys alone, the cost would have soared past one billion dollars. The financial impact is nothing short of colossal.
TCS, the industry leader, faces a similar burden. The analysis found about 82% of its new H-1B approvals would have triggered the fee. This affects approximately 6,500 workers for Tata Consultancy Services.
The policy clearly targets a specific business model. It disproportionately hits multinational staffing and outsourcing firms acting as intermediaries. It spares tech companies hiring directly from US campuses or via internal transfers.
Industry observers predict a rapid strategic shift. Companies are already reassessing their staffing approaches. The goal is to reduce reliance on fresh H-1B visas from abroad.
Many are turning to local recruitment within the United States. Others are choosing to keep more work offshore in lower-cost locations. The H-1B visa landscape is fundamentally changing.
Experts warn of a sharp drop in visa applications. The combination of this fee and potential lottery changes could slash registrations. Some forecasts suggest a 30 to 50 percent decline in the coming year.
Employers will likely avoid entries that incur the massive charge. This could reshape the entire talent pipeline for the tech sector. The H-1B visa program may never look the same.
Legal challenges are mounting against the policy. A coalition of Democratic-led states and business groups has filed lawsuits. They argue the $100,000 fee wildly exceeds reasonable administrative costs.
The lawsuits also claim the proclamation oversteps presidential authority. The battle over the H-1B visa fee is now headed to the courts. The final outcome remains uncertain for TCS and Infosys.
For now, the financial threat is very real. These IT titans must navigate this new, costly reality. Their traditional business model faces its most significant test yet.