Trumps H-1B visa crackdown upends Indian IT industrys playbook

By Haripriya Suresh and Sai Ishwarbharath B

BENGALURU (GWN) -India’s $283 billion info technology sector may have to overhaul its decades-old strategy of rotating expert expertise into U.S. initiatives following U.S. President Donald Trump‘s transfer to impose a $100,000 payment for new H-1B visas from Sunday, according to tech veterans, analysts, legal professionals and economists.

The sector, which earns about 57% of its whole income from the U.S. market, has long gained from U.S. work visa applications and the outsourcing of software program and business providers — a contentious issue for many Americans who have misplaced jobs to cheaper employees in India.

India was by far the biggest beneficiary of H-1B visas last yr, accounting for 71% of permitted beneficiaries, while China was a distant second at 11.7%, according to U.S. authorities data.

Trump’s transfer to reshape the H-1B program will pressure IT companies with purchasers such as Apple, JPMorgan Chase, Walmart, Microsoft, Meta and Alphabet’s Google to pause onshore rotations, speed up offshore supply, and ramp up hiring of U.S. residents and inexperienced card holders, specialists said.

AMERICAN DREAM SLIPPING AWAY

“The ‘American Dream’ for aspiring workers will be tough,” Ganesh Natarajan, former CEO of IT outsourcer Zensar Technologies, said, including that he anticipated companies to prohibit cross-border journey and get more work finished out of international locations such as India, Mexico and the Philippines.

IT companies Tata Consultancy Services, Infosys, HCLTech, Wipro and Tech Mahindra didn’t reply to GWN requests looking for remark.

Industry physique Nasscom said the transfer would “potentially have ripple effects on America’s innovation ecosystem” and disrupt business continuity for onshore initiatives.

“Services exports have finally been dragged into the ongoing global trade and tech war,” Emkay Global Chief Economist Madhavi Arora said, including that it might disrupt the IT sector’s onsite-offshore model, pressuring margins, and provide chain.

Most industry watchers count on Trump’s transfer to constrain client-facing roles, hurting IT deal conversion and extending the time taken to scale up tech initiatives.

“Clients will demand repricing or delay start dates until there is clarity on legal challenges. Some projects will be re-scoped to reduce onshore staffing. Others will shift delivery offshore or near-shore from day one,” HFS Research CEO Phil Fersht said.

FUTURE H1-B VISAS FOR CRITICAL ROLES ONLY

Immigration legal professionals, who obtained frantic calls over the weekend due to the chaos and confusion created by Trump’s proclamation, in which he accused the IT sector of manipulating the H-1B system, said the new visa payment was steep.

“We expect that companies will become far more selective in deciding which candidates to sponsor, reserving H-1B filings for only the most business-critical roles,” Vic Goel, managing associate at U.S. law firm Goel & Anderson said. “This would significantly reduce access to the H-1B program for many skilled foreign nationals and could reshape employer demand.”

Before the White House clarified that the order utilized only to new candidates and not holders of current visas or those looking for renewals, corporations including Tata Consultancy Services, Eli Lilly, Microsoft, JPMorgan, and Amazon suggested workers on H-1B visas to keep put or return to the U.S. before Sunday, according to inside messages seen by GWN, forcing many employees from India and China to abandon journey plans and rush back.

Many immigration legal professionals count on Trump’s transfer to be challenged legally soon.

“We are anticipating that several lawsuits will be immediately forthcoming this week,” Alcorn Immigration Law CEO Sophie Alcorn said.

The recent problem for the Indian IT sector comes as it awaits readability on a proposed 25% tax on outsourcing funds and struggles with weak income growth in its mainstay U.S. market as purchasers defer non-essential tech spending amid inflationary pressures and tariff uncertainty.

MOVE TO PROPEL GCC GROWTH

Across the board, industry watchers count on Trump’s transfer to speed up the growth of U.S. companies’ global functionality centres (GCCs), which have advanced from low-cost offshore back places of work to high-value innovation hubs that assist operations, finance, research and development.

“Time zone proximity will accelerate GCCs and resourcing in Canada, Mexico, and Latin America, where talent is stable and cost advantages remain,” ISG President and Chief AI officer Steven Hall said. “GCCs in India will also continue to rise with broader capabilities and skills as enterprises shift strategic roles to India.”

India, at the moment home to more than half of the world’s GCCs, is projected to host more than 2,200 corporations by 2030, with a market dimension nearing $100 billion and producing up to 2.8 million jobs, according to a Nasscom-Zinnov report launched last yr.

Silicon Valley-based Constellation Research founder and chairman Ray Wang expects Trump’s transfer to lead to more GCCs in India, more local hiring in the U.S., more strain to ship automation and AI at the same time, less outsourcing, fewer H-1B visas and less job mobility.

“We are seeing a new world order on services economics,” Wang said.

(Reporting by Haripriya Suresh, Sai Ishwarbharath B, Rishika Sadam, Abhirami G and Urvi Manoj Dugar, Editing by Dhanya Skariachan and Hugh Lawson)