U.S. H-1B fee proposal likely to increase cost pressure on Indian IT employers

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Cost pressure from H-1B fee

Highlights

The Department of Homeland Security has proposed an additional $103,265 fee on all cap-subject H-1B petitions, which will be in addition to existing government fees.
This fee will impact India and Indian IT companies more, as 71 percent of H-1B approvals are linked to India and the industry will face increased cost pressure.
The proposed fee is higher than the median annual wage of $99,000 for bachelor's H-1B holders and is estimated to generate about $8.8 billion annually for the government.

This article was translated from the original. Read the original version by our correspondent here.

Scope and Timeline of the Proposed Fee

According to Forbes India, the Department of Homeland Security has proposed a separate $103,265 fee on H-1B petitions subject to the annual cap, which will be in addition to existing government fees. This amount must be paid by the employer at the time of filing the petition, so it could also impact petitions that are ultimately not approved.

The H-1B program allows U.S. employers to hire foreign professionals for specialty occupations that typically require a bachelor's degree or equivalent. The program has an annual cap of 85,000 new H-1Bs, including 65,000 regular slots and 20,000 additional slots for those with a master's degree or higher from a U.S. university.

The proposed fee will apply to cap-subject petitions, including cases filed under the advanced degree allocation. In contrast, cap-exempt petitions—such as extensions, amendments, transfers, and petitions from qualifying universities or certain research organizations—will not be subject to this fee.

This proposal is separate from the $100,000 payment introduced in September 2025, which applied to certain new H-1B applications from outside the U.S. The new $103,265 fee is proposed to be levied separately on all cap-subject H-1B petitions, so it could also affect some individuals changing status to H-1B within the U.S.

Potential Impact on Indian Professionals and the IT Sector

Indian nationals make up the largest share of H-1B beneficiaries, so the proposed change is likely to have a greater impact on India and the Indian IT industry. According to USCIS data for U.S. fiscal year 2024, there were 283,755 approved H-1B petitions linked to beneficiaries born in India, accounting for 71 percent of all approved petitions, while China was second with 11.7 percent.

The IT sector's dependence is also notable. According to USCIS for fiscal year 2023, 65 percent of all approved H-1B petitions were for computer-related occupations, while H-1B Track's compiled data for FY19 to FY26 lists Tata Consultancy Services, Infosys, HCL America, and Wipro among the top sponsors.

This proposal is also significant compared to wage levels. According to USCIS for fiscal year 2023, the median wage for H-1B beneficiaries with a bachelor's degree was $99,000, and $114,000 for those with a master's degree, making the proposed $103,265 fee higher than the median annual wage for the bachelor's category.

Under the current system, the government fee for a typical H-1B petition is about $3,380, with legal costs extra. For cap-subject cases, there is a $215 registration fee, a $2,965 premium processing fee, and some employers may also pay an additional $4,000 fee, so the new proposal greatly increases the total cost.

The Department of Homeland Security says this fee is intended to partially offset the federal government's cost of administering the legal immigration system. The department estimates that, based on 85,000 cap-subject petitions, this could raise about $8.8 billion annually.

U.S. Citizenship and Immigration Services spokesperson Zach Kahler said the proposed fee aims to recover the federal government's costs for adjudication, screening, and support of legal immigration programs. Vice President JD Vance also supported the administration's stance on X on August 24, saying that if an American company needs workers, it should hire and train American workers.

India had said in September 2025 regarding the earlier $100,000 payment that it was studying the move and its implications. At that time, India's Ministry of External Affairs said that the movement of skilled talent has contributed to technology development, innovation, economic growth, competitiveness, and wealth creation in both the U.S. and India, while Nasscom said in a statement on August 25 that Indian IT companies are reducing their dependence on H-1B and increasing investment in the U.S. workforce and STEM talent pipeline.

Going forward, the Department of Homeland Security is accepting public comments until September 24. After that, the department will review the feedback and decide whether to implement this fee as a final rule.

In our previous report, based on the ICRA Business Activity Monitor, India's economic activity growth in July 2026 was projected at 11.4%, but some moderation was noted compared to June, with signs of slowdown in some core sector sub-segments. It also highlighted that weak monsoon and rising retail inflation pose major risks to rural demand and discretionary spending for FY2027, and that policy tightening may become more likely if inflation rises.

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