US Homeland Security extends the 9-11 Response and Biometric Entry-Exit Fee to H-1B and L-1 extension-of-stay petitions, raising the running cost of keeping Indian IT staff in the US
12 Aug, 04:23 IST · Plays out over months · 1 source
America now charges Indian IT firms an extra fee every time they renew a worker's US visa, not just for new ones - a small but permanent cost that nibbles at profit margins at TCS, Infosys, Wipro and Tech Mahindra, and hits hardest at firms keeping the most staff on US soil.
Key facts
What the reporting establishes, before any reading of it.
- The US Department of Homeland Security has expanded the 9-11 Response and Biometric Entry-Exit Fee to cover certain H-1B and L-1 extension-of-stay petitions
- Because it applies to extensions, the cost recurs on the existing US workforce rather than being a one-off on new hires
- This is a far smaller per-head charge than the $100,000 H-1B fee imposed by proclamation on 19 September 2025
- About 71% of H-1B holders in the US are Indian nationals, so Indian IT services carries most of the incidence
How the news spreads
Step by step — from the first companies it hits to whole sectors.
Who it hits first
- Every Indian IT firm renewing a US-based worker's stay pays an additional per-petition fee, compounding across thousands of filings a year.
- Tech Mahindra, with the highest share of work done on US soil among the large caps, files the most extensions per rupee of revenue and so carries the highest cost intensity.
- The fee lands on operating margin because it cannot easily be re-billed to clients under fixed-price contracts already signed.
Who may gain
- Firms with the lowest onsite mix - HCLTech in particular - gain relative cost advantage, because the fee scales with how many people a firm keeps inside the United States.
- Global capability centres and offshore delivery models become relatively cheaper than onsite deployment, accelerating a shift Indian IT has been making for a decade.
- Nearshore delivery locations such as Mexico, Canada and Latin America gain share of work that would otherwise sit on a US visa.
Along the supply chain
Downstream
US enterprise clients ultimately absorb some of this at contract renewal through higher onsite rates, or accept more offshore delivery in the same contract. Clients in regulated industries - banking, healthcare - that require onsite presence have the least flexibility and will pay the most.
Upstream
Indian IT's upstream is people. Campus hiring and offshore-centre capacity in India become relatively more attractive than deputing staff to the US, so Indian staffing and training providers see steadier demand while US-based subcontractor and visa-processing costs rise.
Where demand moves
Business
No customer demand is created or destroyed by this - the same US clients still need the same work done. What changes is where the work physically sits. A per-petition fee makes each onsite seat more expensive, so firms shift billable hours offshore to India or nearshore to Canada and Mexico. Indian delivery centres therefore gain headcount while US-based project teams shrink, and immigration law firms and visa processing vendors get more, not less, work.
Capital
Investors treat visa cost news as a margin story rather than a growth story, so the reaction is a mild de-rating of the most onsite-heavy names rather than a sector exit. Money rotates within IT toward the offshore-heavy, high-margin names - HCLTech and TCS - and away from Tech Mahindra and Wipro. The weaker rupee at 95.43 per dollar is a simultaneous tailwind for all six that partly cancels this out.
How it spreads across sectors
Information Technology
A recurring per-head cost lands on operating margin, concentrated in the firms with the largest US-onsite footprint, and accelerates the structural shift of billable work offshore.
When it plays out
Immediate
A modest, mostly sentiment-driven markdown of the onsite-heavy names; nothing like the September 2025 shock because the per-head amount is far smaller.
Medium term
A permanent nudge toward offshore and nearshore delivery. Combined with rising US immigration costs generally, it strengthens the case for global capability centres in India and erodes the traditional onsite-heavy staffing model.
Short term
Firms quantify the annual cost in September-quarter commentary. Watch for guidance on onsite mix reduction and any move to re-price contracts at renewal.