The tightening of H-1B visa rules in the United States is doing more than making overseas employment harder for Indian technology professionals. It is forcing a redesign of the business model that connects Indian cities to American companies, shifting more engineering, delivery and product work towards India while reserving a narrower set of roles for workers physically based in the US.
That shift is visible in the numbers. Indians accounted for approximately 70% of approved H-1B petitions in the US fiscal year 2025, with 283,772 Indian-born beneficiaries among 406,348 approved petitions. Technology-related occupations made up the largest category across the programme, while computer-related roles accounted for 252,088 approvals, or 62% of all beneficiaries. The data establishes the scale of Indian dependence on the programme, although the US Citizenship and Immigration Services does not publish a combined breakdown showing the occupations of Indian-born beneficiaries specifically.
The immediate question is who will bear the cost of a more restrictive system. The evidence supplied by Times of India points to a divided impact. Senior and highly paid engineers employed directly by US technology companies may be relatively insulated, particularly if wage-weighted selection favours higher-paid applicants. Early-career professionals and workers deployed through the IT-services staffing model face greater pressure because that model depends on moving large numbers of employees to client locations at comparatively lower wage levels.
This distinction matters for Indian cities because the H-1B system has long connected domestic education, Indian technology companies and international employment. The conventional pathway was relatively straightforward: an employee was educated and hired in India, moved to the US on an H-1B visa, worked at a client site and eventually entered the green-card queue. The restrictions described in the report narrow that pathway at several points instead of merely changing one visa form.
The changes include multiple proposals involving a $100,000 H-1B fee, a wage-weighted lottery that favours more senior workers, tighter scrutiny of layoffs and compliance, and a proposed $70,000 fee for students seeking to work in the US through the Optional Practical Training and STEM-OPT routes. The report also notes statements from the Trump administration suggesting that the H-1B system could be eliminated, although immigration experts cited in the report consider that outcome unlikely.
The more significant development is the way US authorities are examining the employment chain behind each visa holder. Rajiv Dabhadkar, founder of the National Organization for Software and Technology Professionals, told Times of India that the issue is not simply a visa-system overhaul but a deeper labour-market concern. Authorities are increasingly examining who sponsored a worker, who actually employs and controls the worker, where the work is performed, what wage is paid and whether an intermediary is taking a margin.
That focus places the third-party staffing and client-site model under particular pressure. Dabhadkar cited the 2010 Neufeld memorandum, which emphasised an employer’s right to control an H-1B beneficiary by determining when, where and how the worker performs the job. He also referred to a Department of Labor Office of Inspector General investigation involving allegations of wage kickbacks, coercive arrangements and below-wage labour. These concerns connect immigration enforcement to the organisation of work across borders.
The numbers show why Indian IT services companies are exposed. H-1B registrations by TCS, Infosys, HCLTech, Wipro, LTM and Tech Mahindra reportedly fell 92% for FY27, from 21,919 to 1,763. The report says the decline is much sharper than at major US employers. The top seven Indian firms secured just under 5,000 initial H-1B approvals in the most recent cycle, approximately 70% below FY2015 and 37% below FY2024.
These figures indicate that the change is not only a legal or immigration story. It is also a change in how Indian technology companies allocate people, contracts and capital between locations. Xiao Wang, chief executive of Boundless Immigration, described the older model as one in which Indian IT consultants were moved to US client sites. The emerging model combines US local hiring for client-facing work with a larger offshore footprint in India for other functions.
In urban terms, this could strengthen the role of Indian technology clusters even as it reduces the number of professionals sent abroad. The report specifically identifies the possibility of more engineering, artificial intelligence and data-science work, product development, cloud and cybersecurity engineering, remote delivery and Global Capability Centres being located in India. It does not establish how many additional jobs or facilities could result, but it shows the direction in which companies are reorganising their operations.
The impact will not be distributed evenly across the workforce. The median annual compensation for all approved H-1B beneficiaries in FY2025 was around $133,000, while the median for computer-specific roles was approximately $140,000. The reported range extended from $117,000 at the 25th percentile to $179,000 at the 75th percentile. Those figures help explain why a flat fee would weigh more heavily on lower-paid or volume-based deployment models, while wage weighting could improve the relative position of highly paid specialists.
This creates a labour-market split between scarce expertise and scalable delivery. US companies may continue to need people on the ground for project leadership, client engagement and complex technology implementation. At the same time, work that can be performed remotely, including software development, testing and support services, can increasingly be delivered from India and other global delivery centres. The likely organisational response described by the experts is not a complete withdrawal from H-1B sponsorship but a more selective use of it.
The policy alternatives are narrower than the size of the affected workforce. L-1 visas are available for qualifying intracompany transfers, while O-1 visas are intended for individuals with extraordinary ability. Employment-based green-card routes also exist, but the report says EB-1 is highly selective and EB-2 and EB-3 face major India-specific backlogs. Dabhadkar said all available FY2026 EB-2 immigrant visas for India had been exhausted before the fiscal year ended. These categories therefore cannot simply absorb the population that previously relied on H-1B visas.
The distinction between legal availability and practical scalability is central. A visa category may remain open in statute while becoming inaccessible to a large share of the workers and employers who previously used it. Wang told Times of India that H-1B cannot be unilaterally abolished because it is written into the Immigration and Nationality Act and would require an act of Congress to remove. His description of the current direction as “death by restriction” captures a system becoming more expensive and difficult without formally disappearing.
Litigation adds another layer of uncertainty. The report says the $100,000 H-1B fee has been blocked by two federal judges, with business groups and other organisations challenging the administration’s authority and implementation. This means employers and workers must navigate not only changing rules but also a policy environment in which significant measures may be contested in court.
For India, the urban economic consequence may therefore be a redistribution rather than a simple loss. If fewer employees are transferred to the US, more work may remain in Indian delivery centres. If companies expand Global Capability Centres or move higher-value engineering and product functions to India, cities with established technology ecosystems could capture additional activity. However, the supplied evidence does not establish which cities or workers will benefit most, nor does it quantify the likely effect on office demand, housing, transport or local public infrastructure.
What it does establish is that immigration policy is becoming an instrument of corporate geography. The H-1B programme once supported a familiar chain between Indian talent and US client work. Restrictions are weakening that chain and encouraging a different division of labour: local hiring for roles requiring physical presence in the US, selective international transfers for critical skills, and expanded delivery from India for work that does not require a worker to be on site.
The larger urban question is whether Indian cities can convert this shift from a defensive response into sustained high-value employment. The report points to opportunities in AI, data science, cloud, cybersecurity, product development and Global Capability Centres, but it does not show whether companies will retain these functions in India at scale. The outcome will depend on how firms redesign delivery networks and how the immigration system continues to evolve.
The evidence confirms that H-1B restrictions are already reshaping Indian IT deployment, particularly for early-career professionals and staffing-led models. The future of the programme itself remains legally and politically contested, while alternatives such as L-1, O-1 and employment-based green cards remain too narrow or backlogged to serve as direct replacements. The developments requiring close monitoring are the litigation over proposed fees, future H-1B selection rules, company-level hiring patterns and whether more high-value technology work remains anchored in Indian cities.
