Trump’s $100,000 H-1B Visa Shock: Why Indian IT Is Scrambling and What Comes Next

When Donald Trump signed a proclamation in September 2025 imposing a $100,000 application fee on new H-1B visas, the impact was immediate and global. From Bengaluru boardrooms to Silicon Valley campuses, companies were forced to reassess how—and whether—they could continue hiring skilled foreign workers under the US visa programme.

The increase was unprecedented. The H-1B fee jumped from $2,000–$5,000 to $100,000, a surge of more than 2,000%, fundamentally altering the economics of cross-border tech hiring. While the White House later clarified that existing H-1B holders were unaffected, initial uncertainty triggered panic, with reports of firms like Microsoft and Google asking overseas employees to return to the US immediately.

What the New Rule Does

Effective September 21, 2025, the policy requires employers to pay a one-time $100,000 fee for each new H-1B petition involving workers applying from outside the United States. The fee applies only to new consular-processed petitions, not renewals—but its financial impact is severe enough to reshape hiring decisions across industries.

The Trump administration argues the fee discourages companies from overusing the H-1B programme to suppress US wages. Commerce Secretary Howard Lutnick said the cost ensures only genuinely high-skill roles justify foreign hiring. The move aligns with Trump’s long-standing scepticism of the programme, which he once labelled “cheap labour,” even as he later acknowledged its value for top-tier talent.

Indian IT Bears the Heaviest Cost

The financial exposure for Indian IT firms is enormous. According to Bloomberg estimates, Infosys would have paid more than $1.04 billion in H-1B fees between 2020 and 2024 under the new rule, while TCS faces a potential hit of $650 million and Cognizant around $560 million. Together, the three could absorb over $2.25 billion in additional costs.

Markets reacted swiftly. TCS shares fell nearly 9% within a week of the announcement, while Infosys dropped over 6%, reflecting investor concern that margins and growth models were under threat.

Legal Pushback Gains Momentum

The policy is now facing serious legal resistance. On December 12, 2025, a coalition of 19 US states, led by California and Massachusetts, filed lawsuits challenging the fee. They argue the move exceeds congressional authority, bypasses mandatory rule-making procedures, and unlawfully creates barriers to employment.

California Attorney General Rob Bonta said the fee was set arbitrarily and violates federal law, which permits visa charges only to cover administrative costs. Legal experts suggest courts could issue temporary injunctions, potentially freezing the rule while litigation plays out.

How Indian IT Is Rethinking Its Model

Facing higher costs, Indian IT firms are already adjusting. Analysts expect 30–50% fewer H-1B applications, with companies accelerating offshoring to India, near-shoring to Canada and Mexico, and using alternative routes such as L-1 intra-company transfers.

Citi Research estimates the policy could shave 100 basis points off margins and reduce earnings per share by about 6%. Former Infosys CFO Mohandas Pai has warned that the fee will dampen applications and push more work offshore, even as it strengthens India’s domestic startup ecosystem by retaining skilled talent at home.

The impact extends well beyond Indian IT. Nearly 17,000 H-1B visas were issued to medical professionals in FY 2024, many serving rural US hospitals already struggling with doctor shortages. Institutions like West River Health Services in North Dakota now face an impossible choice: pay $100,000 per hire or leave positions vacant.

Educators and universities are also affected, with an estimated 30,000 teachers nationwide holding H-1B visas. Economists warn the policy could reduce remittances to India and dampen international student interest in US universities.

Why US Tech Is Less Alarmed

American tech giants are impacted too—but far less severely. Amazon, the largest H-1B employer, saw its stock fall under 5%, compared to steeper losses for Indian firms. The reason is salary structure: Amazon’s H-1B employees earn significantly more, making the fee a smaller proportional burden. Some analysts note that fewer Indian applications may even improve lottery odds for US firms.

What Happens Next

The coming months will be decisive. The March 2026 H-1B lottery will be the first conducted fully under the new rules, and application volumes are expected to plunge. Whether courts strike down the fee or allow it to stand, Trump’s policy has already altered how global talent moves, and who can afford it.