US to make H-1B visa costlier by $100,000. That affects a Tesla more than a TCS.
For TCS, 3,000-4,000 H-1B visas annually is small in its scheme of things. Tesla, meanwhile, has hired 1,355 visa holders while laying off over 6,000 Americans.
The United States is set to make H-1B visa costlier by up to $100,000, according to a Bloomberg report. That’s a bigger setback for a Tesla than a TCS in 2025.
US President Donald Trump is expected to sign a proclamation as soon as Friday that would move to extensively overhaul the H1-B visa program, requiring a $100,000 fee to applications in a bid to curb overuse, Bloomberg quoted an unnamed White House official as saying. The move will require a “$100,000 payment to accompany or supplement H-1B petitions for new applications”, according to a factsheet seen by Bloomberg News. The payment would be in addition to current fees, which are quite modest.
The news pushed Infosys ADRs and Wipro ADRs lower by 3.41% and 2.10%, respectively. Accenture Plc and Cognizant Technology Solutions Corp., where Indians are a significant chunk of the employee base, hit session lows.
H-1B Visa Rules
H-1B visas are awarded based on a lottery system, but flaws in the system created loopholes that some employers have exploited by flooding the lottery with entries. The US has changed the lottery process to reduce the ability to game its outcome, and now, Trump is weighing further changes to the way applications are considered.
Indian nationals accounted for 71%, or 283,397, of the 399,395 H-1B visa petitions approved by the US Citizenship and Immigration Services in the fiscal year ended 30 September 2024, according to USCIS data. Of all the H-1B petitions approved in that year, “computer-related occupations” accounted for 64% of all beneficiaries. These applicants drew an average salary of $120,000. An H-1B visa is generally for a period of up to three years.
H-1B Visa & India’s IT Sector
That India’s $283-billion IT services industry is built on the back of H-1B visa won’t be far from the truth. The delivery model is a mix of offshore talent in India and onsite in client markets— mainly in the US. An H-1B worker may cost a firm $80,000-$100,000 annually as against $120,000-$150,000 for a local hire in the same role. This labour arbitrage has been one of the pillars of India’s IT outsourcing model.
The Trump administration wants to change that.
The US president plans to order the Labour Secretary to undertake a rule-making process to revise prevailing wage levels for the H-1B program—a move intended to limit the use of visas to undercut wages that would otherwise be paid to American workers.
In the factsheet seen by Bloomberg, the Trump White House said American workers are being replaced with lower-paid foreign labour and called it a national security threat. The dynamic is suppressing wages and disincentivising Americans from choosing careers in STEM fields.
US Hiring By TCS, Infosys And Wipro
To be sure, India’s IT heavyweights have stepped up US hiring over the years to reduce their dependence on H-1B visas, against the backdrop of a stringent US immigration policy.
The number of H-1B visas for initial employment by India’s top seven IT firms fell 56% to 6,700 in FY23 versus 15,100 in FY15, according to data from the National Foundation of American Policy. Americans now make up 50-60% of the US employee base of Infosys and TCS. That mix rises to as high as 70% in the case of Wipro and 80% for HCL Technologies Ltd.
According to Teamlease Digital data cited by Moneycontrol, India’s Top 5 IT companies accounted for only 20% of the approved H-1B visas in 2024.
In the same report, TCS CEO Krithi Krithivasan told Moneycontrol that he was not worried about the possible changes in H-1B visa rules under Trump’s second term. “In any given year, we get about 3,000 to 4,000 H-1B visas. In our overall scheme of things, that’s a small number,” he had said then. “If there is a decrease in H-1B, we can compensate with other means, or we can move the work to India.”
Still, the number of H-1B visa approvals has gone up every year. If not Indian IT firms, who is opting for them?
“The demand for H-1B visas in FY24 was driven by the global digital transformation, increasing need for specialised talent in AI, cloud computing, and cybersecurity,” Krishna Vij, business head for IT staffing at Teamlease Digital, told Moneycontrol in the same report. “The ongoing STEM skill gap in the US also fuelled demand, particularly in software development and AI.”
No wonder, then, that Elon Musk has come out in support of the H-1B visa.
Elon Musk & H-1B Visa
Musk and Vivek Ramaswamy, who were tasked with running the Department of Government Efficiency (DOGE), have argued in favour of the H-1B visa as a means to recruit top talent from across the world to remain competitive.
“The reason I’m in America, along with so many critical people who built SpaceX, Tesla and hundreds of other companies that make America strong, is because of H1B,” Musk wrote on X on 27 December 2024.
On 12 September 2025, Tesla Inc. was accused in a lawsuit of favouring visa holders over Americans for jobs so that it can pay less. The complaint said Tesla hired an estimated 1,355 visa holders while laying off more than 6,000 workers domestically, “the vast majority” believed to be US citizens.
“While visa workers make up just a fraction of the United States labor market, Tesla prefers to hire these candidates over US citizens, as it can pay visa-dependent employees less than Americans employees performing the same work, a practice in the industry known as ‘wage theft’,” the complaint stated.
