MUMBAI: New US visa fee hikes will not have any material impact on the domestic IT companies as the incremental cost of around $250 million is just about 1% of the top four companies’ annual revenue, and so they will remain resilient on the back of strong profitability and a structural talent gap in the US which will help offset the new financial pressure.
The IT sector represents about 80% of the total services exports from the country, making its health critical to the export growth, and the US is the largest single export market for them contributing over 53% of their revenue now, down from 60% earlier, Moody’s said in a note.
Software exports rose 7.3% during fiscal 2025 to $204.7 billion,. On-site services, the proportion subject to visa restrictions, accounted for about 10% of total software services exports.
Indian firms' increase in local hiring in the US will mitigate some of the impact of US immigration restrictions. Still, the US remains their largest single software-services export market. The share of exports to Europe jumped to 33% in the most recent fiscal year from 23% in fiscal 2017, while that for the US declined to 53% from around 60% in fiscal 2017.
Stating that large software exporters can absorb the hit, the report said for companies like TCS, Infosys, Wipro and HCL Tech the new visa fees will increase operating expenses by an estimated $100-250 million per annum, but that’s only about 1% of their revenue and all these companies have ample cash reserves and high profitability, providing a strong buffer. For instance as of December 2025, For example, as of 31 December 2025, TCS and Infosys had around $7 billion and $4 billion in cash and cash equivalents, respectively.
“While the new visa costs create short-term headwinds, the fundamental strengths of large Indian IT firms—combined with the structural need for their services in the US—ensure their credit profiles will remain stable. On annual basis, there will be a cost increase of $100-250 million for the top companies but this is only 1% of their annual revenue combined, which given their high profitability can easily be absorbed,” said Moody’s analysts Sweta Patodia and Jingjing Dang in a note.
Noting the persistent talent gap in the US, the report said the world’s largest market faces an estimated annual shortfall of around 200,000 IT professionals.
“This structural gap reinforces the long-term reliance of US companies on India's skilled and English-speaking IT workforce, anchoring demand despite tighter immigration policies,” they said.
“India is uniquely positioned to bridge this gap, given its large, English-speaking and technically skilled workforce. Indian nationals have accounted for 70-75% of all H-1B visas issued since 2020, reflecting their dominant share in meeting demand for skilled labor in the US. India produces around 2.5 million of STEM (science, technology, engineering and mathematics) graduates annually, compared to around 8,50,000 in the US, highlighting its role as a key talent supplier in the technology sector,” they said.
However, they warned that sustained US restrictions will weigh on these companies as the ongoing changes in US immigration policy will constrain the growth prospects of the country’s services exports and raise costs for its IT services sector. Still, we expect the negative effects will be partially offset by increased local hiring in the US, near-shoring and the expansion of global capability centers.
Domestic IT services companies have strong profitability, solid balance sheets and robust cash reserves that support their credit strength.
Services exports have grown exponentially at a compound annual growth rate of 12% between fiscals 2017 and 2025. Services exports now account for almost half of total exports, and will likely surpass goods exports by 2030.
The recently announced free trade agreement between India and the EU holds the potential to further increase services exports to the EU, benefiting India's IT services providers among other service sectors, particularly given the enhanced professional mobility through a facilitative and predictable framework established in the FTA.