US proposes an extra $103,265 fee on every cap-subject H-1B petition, opening a 30-day comment window that could make the charge final by the end of 2026
25 Aug, 04:36 IST · Plays out over weeks · 4 sources
America wants to charge more than $103,000 extra for each new H-1B work visa, the permit Indian software firms use to send engineers to US client sites - so sending an engineer becomes far dearer, and the companies that still rely on it face thinner profits until they hire more Americans or move the work back to India.
Key facts
What the reporting establishes, before any reading of it.
- The proposed rule adds a supplemental fee of $103,265 on top of existing charges for every cap-subject H-1B petition
- A 30-day public comment period has begun and the rule could be finalised by the end of 2026
- About 71% of H-1B holders are Indian nationals, and Indian IT services firms are the largest single group of cap-subject filers
- Indian IT's subcontracting bill is already running high as firms hedge H-1B uncertainty with local US contractors
How the news spreads
Step by step — from the first companies it hits to whole sectors.
Who it hits first
- Every Indian IT services firm that files cap-subject H-1B petitions faces a $103,265 charge per new visa, on top of existing fees
- Tech Mahindra is the most exposed liquid name in the data ranking, followed by the rest of the large caps
- Onsite-heavy mid-caps - Coforge, Persistent, L&T Technology Services - carry more visas per rupee of revenue than the large caps
- Indian IT's already-elevated subcontracting bill rises further as firms hire costly local US contractors instead of moving people
Who may gain
- Firms with the highest offshore delivery mix - Infosys and HCLTech in this group - because the fee never touches work done from India
- Indian office-park landlords and data-centre operators, because work pushed back offshore needs seats and compute in India
- Staffing and flexi-hiring firms that supply local US contractors as a visa substitute
Along the supply chain
Downstream
Downstream, US enterprise clients of Indian IT face higher rate cards or slower project starts at renewal, and Indian office parks and data centres pick up the seats and compute for work that shifts back offshore.
Upstream
Upstream of the IT firms sit the immigration law firms, visa processing agents and relocation providers whose per-case volume falls as filings drop; Indian campus hiring also slows because the onsite career path that justified premium salaries narrows.
Where demand moves
Business
Work that needed an engineer on a US client site becomes roughly $103,000 more expensive to staff, so the same demand gets rerouted three ways: to offshore delivery centres in India, to locally-hired American staff, and to US-based subcontractors. The client's project does not disappear - it just gets served from a different chair, and the extra cost is split between the vendor's margin and the client's bill.
Capital
Money exits the onsite-heavy mid-caps (Coforge, Persistent, LTTS) first because their exposure per rupee of revenue is highest, and rotates into the offshore-heavy, cheaply-valued large caps - Infosys at PE 14.73 and HCLTech at 19.76 against a sector median of 24.01. Some rotates entirely out of IT into domestic-demand sectors while the comment period runs.
How it spreads across sectors
IT Services
Mid-caps with the heaviest onsite mix take the largest hit
Information Technology
Onsite delivery cost inflation, margin pressure at renewal, faster offshore shift
Services
Staffing, visa processing and relocation volumes fall while US subcontracting demand rises
codex additions
When it plays out
Immediate
IT stocks trade lower on the headline; the September 2025 precedent says a 2-4% one-day drop for large caps and 4%-plus for onsite-heavy mid-caps.
Medium term
If finalised by end-2026, expect a structural acceleration of offshore delivery, more local US hiring and a permanently higher subcontracting bill - a margin headwind of a few tenths of a percent rather than a revenue cliff.
Short term
The 30-day comment period is the live variable - Nasscom and US industry bodies will argue the fee is unlawful or unworkable, and any signal of dilution reverses the move quickly, exactly as it did in 2025.
Other sectors it reaches
- {"causal_chain":"Higher H-1B costs accelerate offshore delivery and GCC expansion in India, increasing demand for Grade-A office space in Bengaluru, Hyderabad, Pune and NCR.","direction":"positive","example_tickers":["DLF","OBEROIRLTY","PHOENIXLTD"],"magnitude":"medium","notes":"Benefit depends on whether firms add India seats rather than only absorb margin pressure.","sector":"Commercial real estate and office parks","time_horizon":"1_to_6_months"}
- {"causal_chain":"More offshore delivery raises enterprise demand for secure connectivity, leased lines, cloud access and campus bandwidth for Indian delivery centers.","direction":"positive","example_tickers":["BHARTIARTL","TATACOMM","INDUSTOWER"],"magnitude":"small","notes":"Incremental demand is plausible but spread across many large clients.","sector":"Telecom and digital connectivity infrastructure","time_horizon":"1_to_6_months"}
- {"causal_chain":"Offshoring more work and expanding India-based GCC operations increases local hosting, colocation, cybersecurity and compute infrastructure needs.","direction":"positive","example_tickers":["NETWEB","ANANTRAJ","TATACOMM"],"magnitude":"medium","notes":"Most relevant for companies exposed to enterprise infrastructure rather than pure consumer internet.","sector":"Data centers and enterprise cloud infrastructure","time_horizon":"1_to_6_months"}
- {"causal_chain":"Visa-cost uncertainty pushes firms to rebalance staffing models, hire locally in India, use contractors, and expand recruitment/process outsourcing.","direction":"positive","example_tickers":["QUESS","TEAMLEASE","SIS"],"magnitude":"medium","notes":"Draft mentions staffing generally, but listed HR outsourcing/flexi-staffing could be a distinct tradable ripple.","sector":"HR outsourcing and flexi staffing","time_horizon":"1_to_4_weeks"}
- {"causal_chain":"Lower long-duration onsite deployment may reduce India-US relocation travel, but visa uncertainty can increase short business trips, transition visits and client-management travel.","direction":"mixed","example_tickers":["INDIGO","IXIGO","EASEMYTRIP"],"magnitude":"small","notes":"Net effect is ambiguous because fewer deputations may be partly offset by more short-term travel.","sector":"Aviation and corporate travel","time_horizon":"1_to_4_weeks"}
- {"causal_chain":"If US work-visa economics worsen, Indian tech workers may redirect toward domestic upskilling, alternative geographies, management programs or certification-led career shifts.","direction":"positive","example_tickers":["NIITLTD","APTECHT","VERANDA"],"magnitude":"small","notes":"Second-order and sentiment-driven; strongest if policy finalisation looks likely.","sector":"Education, upskilling and test-prep","time_horizon":"1_to_6_months"}
- {"causal_chain":"More senior technology roles retained or created in India can support housing demand in IT-heavy cities, while weaker IT margins could hurt bonuses and affordability.","direction":"mixed","example_tickers":["PRESTIGE","BRIGADE","SOBHA"],"magnitude":"small","notes":"Positive seat-growth effect competes with potential pressure on IT employee compensation.","sector":"Urban residential real estate","time_horizon":"1_to_6_months"}
- {"causal_chain":"IT-sector margin pressure and slower onsite wage growth can weigh on salary-linked consumption, mortgages and unsecured credit in tech-heavy urban borrower pools.","direction":"negative","example_tickers":["HDFCBANK","ICICIBANK","KOTAKBANK"],"magnitude":"small","notes":"Impact is diluted at large banks, but relevant through urban salaried borrower sentiment.","sector":"Banking and retail credit","time_horizon":"1_to_6_months"}
- {"causal_chain":"If IT exporters protect margins through slower hikes or hiring caution, discretionary spending by technology employees may soften in metros.","direction":"negative","example_tickers":["TITAN","M\u0026M","MARUTI"],"magnitude":"small","notes":"More likely a sentiment ripple than an immediate earnings driver.","sector":"Consumer discretionary and autos","time_horizon":"1_to_6_months"}