Trump’s H-1B crackdown hurts Indian IT, but the industry saw it coming

Indian IT companies are facing a tougher US immigration environment, but the latest crackdown has not caught the industry completely off guard. Data shows that major Indian technology firms had already reduced their dependence on new H-1B workers, while shifting more hiring and delivery work to the US, India and other countries.

The change was visible before President Donald Trump’s latest measures. In fiscal 2025, the seven largest Indian-based IT companies received 4,573 approvals for H-1B petitions for initial employment, according to an analysis by the National Foundation for American Policy (NFAP) based on US Citizenship and Immigration Services data.

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That was 37% lower than in FY2024 and 70% below the level recorded in 2015.

The visa tap was already running dry

The figures cover new and concurrent employment. They do not include most extensions for existing employees and should not be read as a direct count of workers or visas issued at US consulates.

The decline was sharp among several major Indian IT companies.

Company	FY2023	FY2024	FY2025
TCS	1,174	1,452	846
Cognizant	2,597	2,873	743
HCL America	715	1,248	379
LTIMindtree	914	798	401

Source: NFAP analysis of USCIS H-1B Employer Data Hub data. Figures refer to approved petitions for initial employment, not total H-1B workers or visas issued.

Only three Indian-based companies appeared among the 25 largest employers of new H-1B workers in FY2025. By contrast, US technology companies dominated the list. Amazon received 4,644 approvals for initial employment, followed by Meta with 1,555, Microsoft with 1,394 and Google with 1,050.

Employer	FY2023	FY2024	FY2025
Amazon	4,052	3,871	4,644
Meta	735	920	1,555
Microsoft	987	1,264	1,394
Google	1,267	1,058	1,050

The shift suggests that the US technology market continues to need skilled foreign workers, but Indian IT services companies are no longer receiving new H-1B approvals at the scale they once did.

The five-year record shows a mixed picture

The broader H-1B data does not show a uniform collapse. The denial rate for initial-employment petitions overall has moved up and down over the past five fiscal years.

Fiscal year	Denial rate for initial-employment petitions
FY2021	4.0%
FY2022	2.2%
FY2023	3.5%
FY2024	2.5%
FY2025	2.8%

Source: NFAP analysis of USCIS H-1B Employer Data Hub data. The figures cover initial employment, including new and concurrent employment.

The rate is therefore higher than in FY2024, but far below the levels recorded during Trump’s first term. The denial rate for initial-employment petitions reached 24% in FY2018, 21% in FY2019 and 13% in FY2020.

The more important change for Indian IT companies is the composition of approvals.

In FY2025, US employers received approval for 114,806 petitions for initial employment. These included new and concurrent employment. They also received 291,542 approvals for continuing employment.

Continuing employment includes extensions, amendments and changes of employer. This means that H-1B workers already in the US remain a major part of the system even as approvals for new workers from Indian IT companies fall.

The annual cap also remains a constraint. The US generally limits new H-1B visas to 85,000 a year—65,000 regular visas and 20,000 for foreign graduates with advanced degrees from US universities. In FY2025, about 442,000 unique beneficiaries were entered into the registration process, according to NFAP’s analysis.

The gap between demand and supply has made the H-1B process a lottery for years. That has forced companies to plan around visa uncertainty even before the latest Trump measures.

The old onsite model is losing ground

Indian IT companies traditionally used H-1B visas to move employees from India to US client locations. The model allowed firms to combine lower-cost delivery from India with teams working onsite with American clients.

That model has been under pressure for several years.

US clients have increasingly demanded local teams, while Indian IT companies have expanded their US hiring. They have also built delivery centres in India and nearshore locations such as Canada and Mexico.

NFAP said the decline in new H-1B approvals had occurred alongside increased local hiring in the US, the ability to perform work outside the country and changes in technology.

This has reduced the need to send large numbers of employees from India to the US. It has also given companies more options if Washington makes overseas hiring more expensive.

The shift does not mean Indian IT companies have stopped using H-1B visas. They still require visas for specialised roles, transfers, project teams and employees who need to work at client locations. But the visa is becoming one part of a wider workforce strategy rather than the centre of the model.

Trump is speeding up the shift

Trump’s policies could accelerate this transition.

His administration introduced a $100,000 payment requirement for certain new H-1B petitions involving workers entering the US from abroad. A federal court later vacated the requirement, and the administration is expected to appeal.

The Department of Homeland Security has separately proposed a fee of $103,265 for certain H-1B petitions. The proposal is still subject to the rule-making process. The Federal Register notice does not mean that the proposed fee has already become law.

The impact of the previous fee was nevertheless visible in overseas filings. Between September 21, 2025 and May 24, 2026, initial consular H-1B petitions fell 91.2% from the comparable period a year earlier, according to USCIS data.

Consular petitions generally involve workers applying from outside the US. That makes the category particularly important for Indian IT companies, which have historically moved employees from India to the US.

A sharp rise in fees could therefore hit Indian companies more than US technology firms with larger domestic recruitment pipelines.

Enforcement is moving beyond the lottery

The administration’s approach is not limited to fees and visa selection.

The US Department of Labor’s Office of Inspector General launched an investigation in July into alleged fraud, worker exploitation, wage kickbacks and misuse of the H-1B and permanent labour certification systems. The agency said it was examining cases involving employers and labour brokers. The Office of Inspector General said the investigation was intended to protect American workers and foreign workers from abuse.

On September 8, Labor Department Inspector General Anthony D’Esposito said on X that Cognizant’s PERM filings had been suspended as part of the investigation. He did not provide details of the allegations, the number of filings affected or the duration of the suspension.

PERM, or Permanent Labour Certification, is generally a step in the employer-sponsored green-card process. A suspension could delay new permanent-residency applications for employees sponsored by Cognizant, although it does not automatically cancel existing visas or previously approved immigration status.

The Cognizant action sends a broader message to the industry: companies may face scrutiny not only over how many workers they sponsor, but also over job descriptions, wages, work locations and the actual duties performed by visa holders.

Prepared, but not protected

Indian IT companies have been preparing for a more restrictive immigration environment for years. Their response has included greater US hiring, more offshore delivery, nearshoring and reduced reliance on new H-1B transfers.

But preparation does not remove the risk.

Higher fees could increase the cost of moving employees. Stricter wage rules could make some roles more expensive. Greater enforcement could delay filings and increase legal and compliance costs. A prolonged green-card suspension could also affect employee retention.

The immediate pressure may therefore be manageable for companies with diversified delivery models. The bigger risk is to the industry’s flexibility: its ability to quickly move people between India and the US when a project demands it.

Trump may be narrowing the route for foreign hires, but Indian IT had already started taking a different route to the American market. The latest policies are not creating that change. They are making it faster, costlier and harder to ignore.