Data from the US Bureau of Consular Affairs shows that in 2024 (October-September), Indians accounted for 68.6% of the 219,659 H-1B visas issued, their lowest share in a decade.
In 2024, Indians received 150,647 H-1B visas and 18,578 L-1 visas in the year ended September 2024, accounting for 68.6% and 25.9% of these work visas issued by the US government, according to a note by Morgan Stanley on 21 September.
A Mint analysis shows that the percentage of H-1B visas received by Indians is at its lowest since 2014, whereas the percentage of L-1 visas that Indians received last fiscal year is at a five-year low.
H-1B visas enable highly-skilled non-immigrants to work in the US on a temporary basis and are valid for three years, with a renewal option available for up to six years. The L-1 category is designed for management and employees with “specialized knowledge” and is valid for five-seven years.
The US issued a total of 291,458 H-1B and L-1 category visas last year, with 58.1% going to Indians, marking the lowest share in work visas since Trump first took office in January 2017.
The numbers reflect a change in strategy for Indian firms. “Over the years, Indian and India-centric companies operating in the US have significantly reduced their dependencies on H-1B visas and steadily increased their local hiring,” technology sector association Nasscom said in a statement last week.
On 19 September, Trump signed an executive order requiring companies to pay $100,000 annually for every new foreign worker under the H-1B visa, up from about $1,000 currently. The White House later clarified that this one-time fee would apply only to new applications.
Introducing the visa fee, the Trump administration said the use of H-1B visas was being exploited. “The H-1B non-immigrant visa program was created to bring temporary workers into the US to perform additive, high-skilled functions, but it has been deliberately exploited to replace, rather than supplement, American workers with lower-paid, lower-skilled labor,” read the executive order singling out information technology (IT) firms to “have prominently manipulated” the visa system, “significantly harming” US workers.
Homegrown IT outsourcers are users of the programme, as they send workers to client locations through these visas. However, a minuscule portion of their total workforce is a recipient of such visas, Nasscom said, adding that these companies had increased their hirings in the US.
“H-1B workers for the top 10 Indian and India-centric companies are less than 1% of their entire employee base. Given this trajectory, we anticipate only a marginal impact for the sector,” the industry body’s statement said on 22 September.
India’s ten top IT services outsourcers, including Tata Consultancy Services Ltd, Infosys Ltd, and HCL Technologies Ltd, employ between 30,000 and 620,000 people each.
As of now, analysts see the impact of the visa fees on Indian companies as negligible for the near-term. “Prima facie, new developments around H-1B visas appear negative; however, we see a minimal near-term impact,” said Morgan Stanley analysts Gaurav Rateria, Sulabh Govila, Shreshtha Chopra and Sakshi Rana, in the note cited above.
Investors, however, are not taking heart from such views, and the country’s ten largest IT services companies have shed nearly 8% of their market cap over the week.
Some analysts believe IT outsourcers could look to relocate their employees who are on H-1B visas. “(W)e believe IT services companies will need to work with customers to move H1-B workers in the US to other geographies, including India or Canada, if they remain on active projects,” said Keith Bachman, an analyst at BMO Capital Markets, in a note of 25 September. “Hence, we think this will be a challenge that all IT services providers have to work through.”
Bachman added that the impact may not be felt evenly. “For Accenture, as management indicated, the impact is less material, in our belief, compared to the Indian providers. We believe H1-B visa mix for the Indian providers is closer to 25% of the US workforce…”