US Extends $100,000 H-1B Fee Until 2027: What It Means for Indian IT Stocks
Indian IT stocks came under pressure on Monday after the US administration extended the $100,000 H-1B payment requirement for another year.
The policy extension has renewed concerns about the cost of sending skilled technology professionals to the United States and the potential impact on Indian IT companies that depend significantly on the US market.
The Nifty IT index fell around -0.08% during Monday’s session, while several major IT stocks declined. OFSS, Wipro, Coforge and Infosys were among the stocks under pressure.
What Is the $100,000 H-1B Fee?
The US introduced the $100,000 payment requirement in September 2025 for certain H-1B workers seeking entry into the United States.
The latest presidential proclamation extends the restriction until September 21, 2027.
Under the extended policy, employers sponsoring covered H-1B workers who are outside the US generally have to make a $100,000 payment, subject to limited national-interest exceptions.
Importantly, this is not simply a $100,000 fee charged to every existing H-1B worker.
The proclamation specifically concerns certain H-1B workers who are outside the United States and seeking entry under covered petitions. Existing workers and certain other categories can be treated differently depending on their circumstances.
Why Is This Important for Indian IT Companies?
The H-1B visa has historically been an important mechanism for technology companies to deploy specialised employees in the US.
Large Indian IT companies have substantial US operations and may need to move employees between India and the US for client projects, specialised technology work and other assignments.
A $100,000 payment significantly increases the cost of using the H-1B route for covered workers.
This could encourage companies to consider alternatives such as:
- Hiring more employees locally in the US
- Increasing offshore delivery from India
- Using existing employees already in the US
- Expanding automation and AI-based delivery
- Changing the mix of onsite and offshore employees
Therefore, the market concern is not necessarily that Indian IT companies will suddenly lose their US business.
The bigger issue is that their employee deployment model could become more expensive and complicated.
Indian IT Stocks Under Pressure
The impact was visible across the IT sector on September 21.
According to market reports, the Nifty IT index was down around 0.7%, while several large IT companies traded lower.
OFSS was among the biggest decliners, falling more than 7% intraday. Wipro, Coforge and Infosys also declined.
However, it is important to distinguish between the H-1B issue and company-specific news.
For example, OFSS had an additional company/parent-related negative catalyst involving reports about financing pressure surrounding an Oracle data-centre project. Therefore, its much larger decline cannot be attributed entirely to the H-1B announcement.
What Did the US Administration Say?
The White House says the measure is intended to address what it describes as abuse of the H-1B programme and protect US workers.
The September 18 proclamation says the administration wants to restrict the use of lower-paid foreign labour and extend the 2025 restrictions for another 12 months.
The White House also said that H-1B registrations from the largest IT outsourcing firms declined substantially following the 2025 measures.
According to the administration, registrations from the largest IT staffing and outsourcing firms fell from 24,946 to 2,055, a decline of about 92%.
These figures are claims made by the US administration, and investors should distinguish them from independent assessments of the policy’s long-term economic impact.
Another Change: Greater Scrutiny of H-1B Applications
The US administration also issued a separate executive order related to H-1B programme oversight.
The order directs relevant agencies to consider an employer’s recent or planned layoffs of similarly situated US workers when reviewing H-1B applications.
The administration says the objective is to improve programme integrity and prevent situations where foreign workers could replace US employees.
This means the issue is broader than just the $100,000 payment.
Indian IT companies and other global technology employers could face higher costs as well as greater scrutiny when deploying H-1B workers.
Is the $100,000 Fee Already Legally Settled?
No.
The policy remains subject to legal challenges.
A federal court in Massachusetts ruled against the government’s implementation of the fee in June 2026, and the administration has appealed that decision.
Therefore, investors should watch the legal proceedings because the eventual court outcome could affect how the $100,000 requirement is implemented.
What Could Be the Impact on Indian IT Companies?
The impact could vary significantly from company to company.
1. Higher Onsite Employee Costs
Companies that rely heavily on sending employees from India to the US could face higher costs for covered H-1B deployments.
2. More Offshore Work
Indian IT companies could respond by moving more technology work to offshore development centres in India and other locations.
This could reduce dependence on the H-1B route but may also change the traditional onsite-offshore revenue model.
3. More Local US Hiring
Another potential response is hiring more US-based employees.
However, local hiring generally comes with a different cost structure and could affect margins depending on the type of work involved.
4. Greater Focus on AI and Automation
The policy could also accelerate the industry’s move toward AI, automation, and higher productivity.
If companies can deliver the same amount of work with fewer on-site employees, dependence on visa-based staffing could gradually decline.
5. Different Impact Across IT Companies
Not every Indian IT company has the same exposure.
Investors should therefore look beyond the headline H-1B fee and examine:
- US revenue contribution
- Onsite employee percentage
- Offshore delivery mix
- H-1B dependency
- Local US hiring
- Employee utilisation
- Operating margins
- Deal pipeline
- Pricing pressure
Why Did IT Stocks Fall Even Though the Broader Market Was Positive?
This is an important point for investors.
The Indian market can rise overall while the IT sector falls because sector-specific news can create a separate risk factor.
On September 21, the H-1B extension created fresh concerns around the future cost of Indian IT companies’ US delivery models.
At the same time, OFSS faced an additional Oracle-related issue, making its decline significantly larger than many other IT stocks.
Therefore, investors should not assume that every IT stock falling today has the same reason.
What Should Investors Watch Next?
The most important developments to monitor are:
- The US court proceedings concerning the $100,000 H-1B payment
- Further changes to H-1B rules
- H-1B application and registration trends
- Indian IT companies’ onsite/offshore employee mix
- US hiring plans
- IT services margins
- New large US technology contracts
- Management commentary on visa restrictions
- Growth in AI-led services and automation
H-1B Fee: A Short-Term Shock or Long-Term Industry Change?
The extension is another challenge for India’s technology-services industry, but its ultimate financial impact will depend on how companies adapt.
Indian IT companies have significant offshore delivery capabilities and may be able to shift more work to India and other locations.
At the same time, some specialised projects still require employees to work directly with US clients.
The key question for investors is therefore not simply “Will the H-1B fee hurt Indian IT?”
It is:
How much additional cost will each company face, and how successfully can that cost be absorbed, passed on to customers or avoided through offshore delivery and automation?
For now, the H-1B extension has clearly become another factor investors are watching closely when valuing Indian IT stocks.
Summary
The US administration has extended the $100,000 H-1B payment requirement for certain covered workers until September 21, 2027.
The policy increases uncertainty and potentially raises the cost of deploying certain foreign technology workers into the US.
Indian IT stocks reacted negatively on September 21, with the Nifty IT index under pressure. However, company-specific factors also matter, as illustrated by the much larger fall in OFSS.
Investors should therefore analyse H-1B exposure company by company rather than treating the entire Indian IT sector as having identical exposure.
Official source — White House: The September 18, 2026 executive action on H-1B programme changes.
