Donald Trump’s H-1B Visa crackdown disrupts Indian IT industry
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With India accounting for the majority of H-1B visa beneficiaries, firms face rising costs, client delays, and pressure to shift more work offshore, as Trump's decision to impose a $100,000 fee shocks India's IT industry.
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US President Donald Trump speaks to reporters aboard Air Force One while en route to Joint Base Andrews, Md. after attending a memorial for conservative activist Charlie Kirk in Glendale, Ariz., Sunday, September 21, 2025. (AP Photo/Julia Demaree Nikhinson)
The United States has upended decades of outsourcing practices after US President Donald Trump imposed a $100,000 fee for new H-1B visas, effective Sunday. The move, according to Bloomberg, directly impacts the Indian IT industry, which earns nearly 57% of its revenue from the US market and has long relied on work visas to rotate skilled talent across borders.
India accounted for 71% of approved H-1B beneficiaries last year, while China was a distant second at 11.7%, according to US government data. With the steep new cost, firms are expected to restrict cross-border travel, scale up offshore delivery, and accelerate local hiring in the United States.
According to Reuters, analysts and industry veterans warn that India’s $283 billion IT sector will need to overhaul its playbook. Companies like Tata Consultancy Services, Infosys, HCLTech, Wipro, and Tech Mahindra may see higher costs, client delays, and pressure on margins.
“The ‘American Dream’ for aspiring workers will be tough,” Ganesh Natarajan, former CEO of Zensar Technologies, told Bloomberg, further predicting more work will shift to India, Mexico, and the Philippines.
Industry body Nasscom warned that the new fee could disrupt business continuity for US projects and ripple through America’s innovation ecosystem.
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Impact on global tech clients and outsourcing model
The new visa rules could disrupt projects for major US clients, including Apple, JPMorgan Chase, Walmart, Microsoft, Meta, and Google. Experts say the outsourcing model will face repricing, delayed start dates, or project rescoping to reduce onshore staffing.
“Some projects will shift offshore or near-shore from day one,” Phil Fersht, CEO of HFS Research, told Bloomberg.
Immigration lawyers reported confusion as Trump accused IT companies of manipulating the US visa system. The White House later clarified that the order applies only to new applicants, not renewals. Still, firms advised H-1B holders to return to the United States before the deadline, prompting many workers from India and China to cut travel plans short.
Several law firms expect legal challenges to Trump’s proclamation. “We are anticipating lawsuits this week,” Sophie Alcorn, CEO of Alcorn Immigration Law, told Bloomberg.
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Shifting strategies: GCC growth and automation
Trump’s decision comes as India’s IT sector faces weak revenue growth and proposed taxes on outsourcing. Experts believe the crackdown will accelerate the rise of global capability centers (GCCs) in India, Canada, Mexico, and Latin America.
“Time zone proximity will accelerate GCCs in the Americas,” Steven Hall of ISG told Bloomberg, while adding that Indian hubs will continue to expand.
Constellation Research’s Ray Wang predicted a shift toward more GCCs, increased US hiring, higher demand for automation and AI, and fewer H-1B visas. “We are seeing a new world order on services economics,” he added.
