H1B visa fee hike may slow India's IT exports growth to below 4%: Report

New Delhi [India], September 22 (ANI): Growth in India's IT services exports could slow to below 4 per cent due to fresh risks from the sharp hike in H-1B visa fees, according to a report by Emkay.

The report noted that it had earlier estimated 5 per cent growth in FY26 and a 7 per cent CAGR over the next five years.

It stated, "Indian IT/software gross/net exports stood USD 181bn/160bn in FY25 and we had assumed 5 per cent growth in net IT services exports for FY26E, with a 7 per cent CAGR growth for next 5 yrs. This could reduce to sub-4 per cent depending on sustained H1B visa-led risks and GCC evolution".

India's IT and software exports stood at USD 181 billion gross and USD 160 billion net in FY25. Global capability centres (GCCs) already contribute more than USD 65 billion in gross exports.

The report noted that GCC evolution and adoption of new growth models by IT firms will be key in shaping the sector's outlook.

As per experts the near-term impact on revenues and margins may remain limited. However, if the higher fees sustain, it could disturb traditional export models.

Madhavi Arora - Chief Economist, Emkay Global stated, "Near-term impact may be limited on IT revenue/margins. However, if sustained, it could disturb Indian IT exports, companies' traditional models, pressurise project margins, disrupt Indian IT supply chains and on-site projects. That said, shift in delivery and export model over time towards offshoring could also provide IT export offsets".

The U.S. recently raised H-1B visa fees to USD 100,000 for new visas, from the earlier USD 1,500-4,000 range. The change does not affect existing visa holders or renewals, but could weigh heavily on Indian IT companies' dependent on new on-site visas.

Nilesh Shah, MD Kotak Mahindra AMC stated, "US restrictions on H 1 B visa will hurt Indians more than Indian IT services companies. We have to create ecosystem in India so that our talent doesn't have to go abroad. Hand cuffing Korean workers, abruptly changing H 1 B visa kind of steps will have adverse effects on US economy over a period of time".

Over time, companies may try to offset the pressure by shifting more delivery offshore, though risks could rise further if the proposed HIRE Act is passed. (ANI)

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