US H-1B visa move to impact Indian IT majors' profit margins by only 0.20%: Crisil Intelligence

Crisil Intelligence, in its note, has said that US President Donald Trump's move to levy higher fees for granting the H-1B visas will impact Indian IT majors' profit margins by only 0.20%. This is because the reliance of IT companies on H-1B visas has been decreasing since 2018, when the denial rates for the visa applications increased to 24%.

It said ‘The US decision to impose a $100,000 fee on new H-1B visas for foreign workers will snip just 10-20 basis points from the operating margins of Indian information technology (IT) services companies next fiscal’.

It said these companies, which had operating margins of 22% in FY25, are likely to share the incremental cost with clients, and added that the pass-through is estimated at 30-70%. It noted that IT firms have expanded offshore delivery, opened near-shore centres and hired locally in the US, and added that this trend has continued even as the denial rate eased to 3% in 2024.

Citing official US data, it said the number of Indian employees on H-1B visas working for TCS, Infosys, Wipro and HCL Technologies almost halved from 34,507 to 17,997 between 2017 and 2025.

It said India's IT services industry is expected to reel in $143-145 billion this fiscal year, marking a revenue growth of 2-4% over last fiscal year, and added that from next fiscal year, growth is expected to be only marginal or flat. It also said that between October 2023 and September 2024, total H-1B visas issued for four IT companies, which account for 50% of the industry revenue, stood at 34,507, and added that over 35% was for initial employment and 65% for continuing employment. It further said the share of initial employment is expected to decline over the medium term.

It said visa expenses come at 0.02-0.05% of the total employee cost, with H-1B visa fees ranging between $2,000 and $5,000 per person. Over a third of the approved H-1B applications from October 2023 to September 2024 were for initial employment and if this share remains constant next fiscal year, the new fee structure could crank up visa cost to 1% of total employee cost.

If the share is reduced, visa-related costs are expected to remain 0.3-0.6% of the total employee cost. Tier-1 IT companies such as TCS, Infosys, Wipro and HCL generate 96% of their revenue from the international markets, with the US alone accounting for 53%. Last fiscal year, the industry exported $119 billion in services, reflecting its scale in global outsourcing.