US President Donald Trump‘s move to introduce a $100,000 fee for new H-1B visa applications is large enough to make sending Indian software engineers to the US economically unviable for Indian tech companies. While the top five Indian IT firms derive roughly 55% of their revenue from the US, Infosys is estimated to have the highest share of employees on H-1B visas.

According to estimates by Jefferies, Infosys had 3.3% of its employees under an H-1B visa in 2024, higher than TCS‘ 2.2%. Hexaware is the second largest share at 3%, followed by LTI Mindtree at 2.5%. Others like HCL Tech, Wipro, and Tech Mahindra vary between 2-2.3%.

Infosys also tops the list of companies with the highest revenue share from H-1B visa employees in 2024 at 11.5%. Hexaware was second at 10.4%, followed by LTIMindtree at 8.8%, Coforge 8.5%, HCL Tech 8%, TCS 7.7% and Wipro 7.5%.

“The US government’s move to introduce a $100K fee for new H1B applications will entirely offset EBIT per H1B employee, driving a shift away from H1B usage toward local hiring, subcontracting, and near/offshoring,” warned Jefferies analyst Akshat Agarwal. “The talent supply crunch will drive up onsite wages, which could drag profits by 4-13%.”

Also Read | $100,000 H-1B visa fee shock: How it could hit Indian IT giants & reconfigure tech outsourcing

The fee’s impact becomes stark when viewed against IT firms’ economics. Indian software companies typically bill onsite employees at $150,000-$200,000 annually while earning roughly 10% margins, translating to just $15,000-$20,000 in annual EBIT per H-1B worker.

With Trump’s $100,000 fee effectively wiping out five to six years of profits from a single visa holder, the math no longer works. Given H-1B visas are capped at six years maximum, “IT firms are likely to shift away from H1B visas,” Jefferies concluded.

Nuvama estimates put the scale of exposure in human terms: Infosys may have 12,000-15,000 employees on H-1B visas, compared to TCS’s 10,000-12,000.

Among mid-tier players, Hexaware faces the second-highest revenue exposure at 10.4%, followed by LTIMindtree at 8.8% and Coforge at 8.5%. TCS, despite its larger workforce, has a lower revenue dependency at 7.7%.

The fee structure forces a fundamental rethink of operating models that have powered India’s IT boom for decades. Companies face four alternatives: hire locals, use subcontractors, near-shore work to Mexico or Canada, or offshore to India.

“If an IT company were to apply for 5,000 H-1Bs in FY27, the annual fee alone would amount to $500 million,” calculated Motilal Oswal. “Given the magnitude of this fee, it is likely that Indian IT companies will avoid new H-1B filings altogether.”

Since H-1B visa lotteries typically run in Q4-Q1, the first impact would hit FY27 petitions.

Not all analysts view the development as catastrophic. Nomura’s Abhishek Bhandari struck a measured tone: “We believe the impact of the changes in H-1B visa program is going to be negligible over the next one year.” He noted that localization efforts since Trump’s first term have already reduced H-1B dependency, with most companies now having over 60% local hiring versus 25-30% in 2016.

JM Financial went further, calling the development “net positive” despite potential margin hits of 15-50 basis points. “With one of the biggest regulatory overhangs now behind, this event is net positive, in our view,” the firm stated.

Nuvama echoed this optimism, noting that “Indian IT firms have significantly reduced their reliance on H-1B visas over the last eight years, with less than half of the US workforce dependent on H-1B visas.”

Moody’s Ratings said steady global demand for IT services will help offset some of the rising costs. “Large IT firms like Tata Consultancy Services (Baa1 stable) and Infosys Limited (Baa1 stable) are better equipped to manage these pressures because of their higher profitability, strong balance sheets and increased focus on local hiring over the last few years,” said Sweta Patodia, AVP, Moody’s Ratings.

The top five Indian IT firms derive roughly 55% of their revenue from the US market, making Trump’s visa policies a make-or-break issue for the sector. Currently, only about 20% of employees work onsite, of which 20-30% hold H-1B visas—meaning visa holders represent just 3-5% of the typical vendor’s workforce.

But their revenue contribution far exceeds their numbers. Jefferies estimates that H-1B employees deliver 7-12% of total revenues across the sector.

As the industry braces for FY27, when the first wave of $100,000 fees hits, the question is how quickly India’s IT titans can adapt their decades-old playbook to survive Trump’s new reality.