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Visa fee of $100,000 for new H-1B visas is "prohibitive"

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H-1B visa fee may lead to legal challenges, selective

sponsorship

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Deals, operating models expected to be overhauled

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U.S. firms' GCCs expected to grow in India, Canada,

Mexico, and

Latin America

By Haripriya Suresh and Sai Ishwarbharath B

BENGALURU, Sept 21 (Reuters) - India's $283 billion

information technology sector will have to overhaul its

decades-old strategy of rotating skilled talent into U.S.

projects following U.S. President Donald Trump's move to impose

a $100,000 fee for new H-1B visas from Sunday, according to tech

veterans, analysts, lawyers and economists.

The sector, which earns about 57% of its total revenue from

the U.S. market, has long gained from U.S. work visa programs

and the outsourcing of software and business services -- a

contentious issue for many Americans who have lost jobs to

cheaper workers in India.

India was by far the largest beneficiary of H-1B visas last

year, accounting for 71% of approved beneficiaries, while China

was a distant second at 11.7%, according to U.S. government

data.

Trump's move to reshape the H-1B program will force IT firms

with clients such as Apple ( AAPL ), JPMorgan Chase ( JPM ),

Walmart ( WMT ), Microsoft ( MSFT ), Meta and

Alphabet's Google to pause onshore rotations,

accelerate offshore delivery, and ramp up hiring of U.S.

citizens and green card holders, experts said.

AMERICAN DREAM SLIPPING AWAY

"The 'American Dream' for aspiring workers will be tough,"

Ganesh Natarajan, former CEO of IT outsourcer Zensar

Technologies, said, adding that he expected firms to restrict

cross-border travel and get more work done out of countries such

as India, Mexico and the Philippines.

IT firms Tata Consultancy Services, Infosys

, HCLTech, Wipro and Tech Mahindra

did not respond to Reuters requests seeking comment.

Industry body Nasscom said the move would "potentially have

ripple effects on America's innovation ecosystem" and disrupt

business continuity for onshore projects.

"Services exports have finally been dragged into the ongoing

global trade and tech war," Emkay Global Chief Economist Madhavi

Arora said, adding that it could disrupt the IT sector's

onsite-offshore model, pressuring margins, and supply chain.

Most industry watchers expect Trump's move to constrain

client-facing roles, hurting IT deal conversion and extending

the time taken to scale up tech projects.

"Clients will demand repricing or delay start dates until

there is clarity on legal challenges. Some projects will be

re-scoped to reduce onshore staffing. Others will shift delivery

offshore or near-shore from day one," HFS Research CEO Phil

Fersht said.

FUTURE H1-B VISAS FOR CRITICAL ROLES ONLY

Immigration lawyers, who received frantic calls over the weekend

due to the chaos and confusion created by Trump's proclamation,

in which he accused the IT sector of manipulating the H-1B

system, said the new visa fee was steep.

"We expect that companies will become far more selective in

deciding which candidates to sponsor, reserving H-1B filings for

only the most business-critical roles," Vic Goel, managing

partner at U.S. law firm Goel & Anderson said. "This would

significantly reduce access to the H-1B program for many skilled

foreign nationals and could reshape employer demand."

Before the White House clarified that the order applied only to

new applicants and not holders of existing visas or those

seeking renewals, companies including Tata Consultancy Services,

Eli Lilly ( LLY ), Microsoft ( MSFT ), JPMorgan ( JPM ), and Amazon ( AMZN )

advised employees on H-1B visas to stay put or return to the

U.S. before Sunday, according to internal messages seen by

Reuters, forcing many workers from India and China to abandon

travel plans and rush back.

Many immigration lawyers expect Trump's move to be

challenged legally soon.

"We are anticipating that several lawsuits will be

immediately forthcoming this week," Alcorn Immigration Law CEO

Sophie Alcorn said.

The fresh challenge for the Indian IT sector comes as it awaits

clarity on a proposed 25% tax on outsourcing payments and

struggles with weak revenue growth in its mainstay U.S. market

as clients defer non-essential tech spending amid inflationary

pressures and tariff uncertainty.

MOVE TO PROPEL GCC GROWTH

Across the board, industry watchers expect Trump's move to

accelerate the growth of U.S. firms' global capability centres

(GCCs), which have evolved from low-cost offshore back offices

to high-value innovation hubs that support operations, finance,

research and development.

"Time zone proximity will accelerate GCCs and resourcing in

Canada, Mexico, and Latin America, where talent is stable and

cost advantages remain," ISG President and Chief AI officer

Steven Hall said. "GCCs in India will also continue to rise with

broader capabilities and skills as enterprises shift strategic

roles to India."

India, currently home to more than half of the world's GCCs, is

projected to host more than 2,200 companies by 2030, with a

market size nearing $100 billion and generating up to 2.8

million jobs, according to a Nasscom-Zinnov report released last

year.

Silicon Valley-based Constellation Research founder and

chairman Ray Wang expects Trump's move to lead to more GCCs in

India, more local hiring in the U.S., more pressure to deliver

automation and AI at the same time, less outsourcing, fewer H-1B

visas and less job mobility.

"We are seeing a new world order on services economics,"

Wang said.