H-1B Visa fee increase: Trump's rates are expanded to services? Explain

The export of services, especially from India, feels the impact of the latest assignment by US President Donald Trump on H-1B visas, as his administration wants to combat immigration in the country. The US government’s recent increase in H-1B visa fees of about $ 1.5-4k to $ 100,000 only applies to new visa applications annually and does not affect existing containers or renewals. However, analysts warn that if it is sustained, this move can disrupt the Indian IT export, put the project margins under pressure, challenge traditional delivery models and complicate the execution of the project on the site. Trump tariffs stretching to services? Vikas Gupta, CEO and Investment Strategist at Omniscience Capital, emphasized the broader context, “Indians receive almost 70 percent of the H-1B visas in the US. The timing of this order, a few days before critical India-American trading agreement, indicates that it is more a negotiating tactic than a strategic immigration reform.” The quick changes in the narrative within hours of the announcement further reinforce that it is a tactical move rather than a thoughtful policy, he added. Meanwhile, Basav Capital co-founder Sandeep Pandey said the H1-1B Visa fee increase by US administration could be called Trump’s tariff 2.0. After imposing tax on the industries of its trading partners, the home looks at the service industries of its trading partners, and it is not limited to India, he said, adding that it will be imposed on all its trading partners, including China and EU countries. “The basic reason for such a step is to generate money, as the US mortgage rose has suddenly risen from 3% to more than 5%. As the US Treasury was supported by the government, the US government has a payment challenge for soon ripening tires,” he added. Prospects for the Indian IT sector Indian IT and software gross and net exports were $ 181 billion and $ 160 billion in FY25 respectively. Over the next five years, Emkay Global has projected the net IT Services export growth of 5 percent for FY26 and a 7 percent CAGR. These growth rates can be reduced to below 4 percent if H-1B visa-related risks continue, along with the evolution of global capabilities (GCCs), which currently make up more than $ 65 billion to gross exports. However, Emkay maintained its FY26 forecast, with the GDP ratio on the current account to the GDP ratio projected at 1.2 percent and the net overpayments are expected to remain about $ 120 billion, similar to FY25, while investors on potential drawback risks warned. It is seen that the returns in the short term are limited to revenue and margins for larger IT businesses, given their constant decline in H-1B dependence to 20-50 percent of US operations. These companies are increasingly relying on local rent, US delivery centers, automation and subcontractors, which the broker has. In contrast, medium and smaller IT firms, which still depend a lot on the traditional “body shop” export models, can face more important challenges as they go over to the local rental and operational strategies of larger firms, the broker added. The Indian IT sector responded sharply to the Indian IT sector to the development, with the Nifty IT index falling more than 3.5 percent in the Intraday trading on Monday, which significantly underperformed the benchmark, which dropped just 0.5 percent. All ingredients of the Nifty IT index were in the red. Tech Mahindra emerged as the top loser and fell by 5.8 percent, followed by Mphasis and persistent systems, each lower than 5 percent. Lead IT shares such as TCs, Wipro, Infosys and HCl Technologies have lost up to 5 percent each. Nikhil Gangil, investment manager at smallcase and founder of intrinsic value, added that IT enterprises are the primary beneficiaries of H-1B visas and that they are now negative after years of overlooking. “The pain is likely to continue in the mid-term, and investors need to stay careful. Nevertheless, Indian, it will be stronger in the long run. Staff and visa service companies, such as BLS International-where 83 percent of Visa services revenue is immediately facing the wind,” he said. Other sectors that should be influenced by Sumit Pokharna, VP of fundamental research at Kotak Securities, have also noted that the ripple effects of the policy will extend beyond Indian IT businesses. “Resistance will be felt in various sectors, including large technology and large businesses in banking, retail and other industries. Organizations in non-it-It will also face challenges due to the increased costs and the implications of staff,” he said. Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, and not of currency. We advise investors to check with certified experts before making investment decisions.