Fresh visa hurdles from Washington are raising costs for Indian technology firms, but the country’s IT leaders appear well prepared to absorb the impact. A new report by a global ratings agency says the sector faces policy pressure, higher expenses and tighter access to US talent pipelines, yet remains financially strong and globally competitive.
The trigger is a proposed $100,000 H-1B visa application fee. Technology services make up about 80% of India’s total services exports, so even small cost increases can affect the wider sector. However, the report notes that top firms such as TCS, Infosys, Wipro and HCL Technologies operate with EBITA margins of 19%–26%, well above global peers at 10%–17%.
If companies continue sponsoring H-1B visas at past levels, the added cost may total $100 million–$250 million, or nearly 1% of revenue. Margins may dip by around 100 basis points. Cash reserves provide further stability. As of December 2025, TCS held about $7 billion in cash, while Infosys had about $4 billion.
The bigger issue is talent supply. The US is expected to face about 300,000 IT job openings annually through 2034, but produces only around 100,000 computer science graduates each year, leaving a gap of 200,000 workers. India, by contrast, generates about 2.5 million STEM graduates annually, compared to 850,000 in the US. Indian nationals have received 70%–75% of H-1B approvals since 2020.
India’s services exports grew at a 12% CAGR between FY2017 and FY2025 and now account for nearly half of total exports. They may surpass goods exports by 2030. Software services rose 7.3% last fiscal year to $204.7 billion. Europe’s share of software exports increased to 33% from 23% over 8 years. Meanwhile, reliance on onsite services dropped to 9.3% from 17.2%.
Indian firms are also investing heavily in AI. TCS plans to invest $6–7 billion to build 1 gigawatt of data-centre capacity. While such investments may pressure free cash flow for 1–2 years, automation could reduce long-term dependence on visas.
Smaller IT firms may struggle with rising costs and AI spending, possibly leading to consolidation. But for industry leaders, strong profits, deep talent pools and global demand remain key strengths.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
