Trump's $100,000 H-1B Visa Fee Puts Squeeze Not Only On Indian IT Firms, But Also US Startups

US President Donald Trump's decision to impose a steep $100,000 fee on H-1B visa applications is reverberating across the global tech industry, from India's outsourcing majors to America's fledgling startups.

For Indian IT companies, the proclamation means higher operating costs in the medium term, as firms are forced to accelerate offshoring and local hiring to offset the additional burden.

Analysts at Dam Capital estimate that replacing one-third of H-1B employees with local hires could shave 20–50 basis points off EBIT margins and 2–4% off earnings per share. Brokerages say Cyient and Tata Consultancy Services are least exposed, while Citi Research highlights HCLTech and Infosys as better placed thanks to their aggressive localisation strategies.

Although the new fee applies prospectively — $100,000 per application, not per year — Morgan Stanley cautioned that the medium-term impact could still be significant as companies reduce their reliance on the US work visa program.

But the adverse implications of the visa aren't confined to India. American founders and venture capitalists told CNBC the move threatens the very fabric of the startup ecosystem, where every hire is critical.

"As an early-stage startup, every hire is precious," said Desmond Lim, co-founder of HR tech platform Workstream, which has already seen all its H-1B applications rejected this year. Alma, a San Francisco-based legal tech startup, reported a 100-fold surge in anxious client inquiries after the White House announcement.

"The main problem becomes: is there enough local supply to meet demand if this international talent goes away?" asked Alma CEO Aizada Marat. Venture capitalists warn that early-stage firms, unlike tech giants, lack the resources to absorb such costs and depend heavily on global talent to compete.