Caution: For private circulation only.Please note that Money Times is for circulation among paid subscribers only. Any attempt to share your access to our website or forwarding your copy to a non-subscriber will disqualify your membership and we will be compelled to stop your supply and forfeit your subscription thereafter without any refund to you.
$100,000 H-1B Visa Fee: A Potential Headwind
The White House is reportedly considering a steep $100,000 annual fee on H-1B visas, a move that could significantly impact Indian IT companies, given their heavy reliance on U.S. markets and onsite delivery models. While the fine print of the policy is awaited, early assessments suggest material risks to profitability across the sector.
Impact by Company
– Birlasoft — Very high exposure: Americas ~86.9% of revenue; ~49.7% onsite delivery.
– Mphasis — High exposure: Americas ~80%; ~53% onsite.
– Persistent Systems — High exposure: North America ~80% (FY25).
– Zensar Technologies — High exposure: U.S. ~67–70%; onsite ~50–56%.
– Sonata Software (Intl. services) — High exposure: USA ~69–71%.
– Coforge — Moderate–high exposure: Americas ~56–57%.
– L&T Technology Services — Moderate–high exposure: North America ~52%; onsite ~44%.
– Cyient — Moderate exposure: Americas ~51%.
– eClerx — Balanced risk: North America ~73–78%, but onshore only ~19%.
– Mastek — Lower exposure: North America ~27%.
Estimated EBITDA Impact:
Based on FY24/25 approvals and financials, estimated EBITDA hit from the proposed fee:
– TCS: 8%
– Infosys: 21%
– Wipro: 8%
– HCLTech: 11%
– Tech Mahindra: 18%
– LTIMindtree: 14%
– Coforge: ~17%
Actual impact will depend on policy specifics and mitigation measures.
Uncertainty Remains:
The critical question is whether the $100,000 levy will be applied retrospectively or only for new entrants. If retrospective, the impact could be severe, straining cash flows immediately. If limited to fresh approvals, the hit will be relatively contained.
Given the uncertainty, a wait-and-watch stance appears prudent until greater clarity emerges on implementation.
