Trump's H-1B Visa Fee Hike: Minimal Impact on Indian IT Giants
US President Donald Trump's H-1B visa fee increase will slightly affect Indian IT companies' profit margins. Despite reduced reliance on these visas, the increased fee impacts operating costs, pushing companies to share costs with clients. The visa fee could reduce remittances and accelerate offshoring.
- Country:
- India
The U.S. President Donald Trump's decision to raise fees for granting H-1B visas will impact profit margins of major Indian IT companies by a minimal 0.20 percent, according to a domestic rating agency. The agency notes that this change comes as Indian IT firms increasingly minimize dependence on these visas for operations.
The latest visa fee increase, set at USD 100,000 for new foreign workers under H-1B, will reduce Indian IT companies' operating margins by only 10-20 basis points in the next fiscal year, reported Crisil Intelligence. The impact is buffered by the IT sector's strategic adaptation, which includes diversifying operations with offshore facilities and local hiring in the U.S.
While the anticipated revenue for India's IT industry is expected to hover around USD 143-145 billion, the new fee is projected to raise visa costs to 1% of the total employee cost if initial employment maintains its current share. The decision might curb remittances from the U.S., the biggest source for India, and slow student migration for higher education.
(With inputs from agencies.)
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