India’s top IT services companies saw a steep fall in H-1B visa approvals in FY26, highlighting how tighter US immigration policies and rising compliance costs are reshaping the traditional outsourcing model relied upon by Indian technology firms for decades.
According to a report by Moneycontrol, the combined H-1B approvals secured by six major Indian IT companies fell nearly 40 per cent, dropping from 18,469 approvals in FY25 to 11,041 in FY26.
The affected companies include TCS, Infosys, Wipro, HCLTech, Tech Mahindra and Cognizant, all of which have historically depended on H-1B visas to deploy Indian technology professionals to the United States for client projects.
The decline comes amid stricter visa rules introduced under US immigration reforms, including a proposed $100,000 H-1B visa fee and a growing shift towards wage-based selection systems designed to prioritise higher-paid workers.
TCS, Wipro and Tech Mahindra record sharp declines
The fall in approvals was uneven across companies, with some firms seeing sharper contractions than others.
According to the Moneycontrol report, TCS, Wipro and Tech Mahindra were among the worst affected during FY26 as approval volumes dropped significantly compared to the previous year.
Key figures reported include:
- Combined approvals for the six firms fell to 11,041 from 18,469
- The decline amounted to nearly 40 per cent year-on-year
- Infosys was the only major Indian IT company to register a rise in approvals
- US immigration policy changes and wage-linked selection norms contributed to the fall
The report noted that the shift reflects broader structural changes in how Indian IT companies manage staffing for US operations.
For years, the H-1B visa system formed the backbone of the offshore-onsite delivery model used by Indian outsourcing firms, enabling companies to send skilled workers to the US at comparatively lower costs.
That model is now facing sustained pressure from policymakers seeking to prioritise domestic hiring and higher wage thresholds.
US immigration changes reshape hiring strategies
The latest decline follows a series of changes in US visa policy and scrutiny around technology outsourcing firms.
Under revised rules and proposed reforms, companies relying heavily on lower-wage H-1B staffing structures are facing greater regulatory pressure and rising operational costs.
The wage-weighted H-1B lottery system has become particularly challenging for outsourcing firms because it favours applicants offered higher salaries, benefiting large US product companies and specialised technology employers over traditional IT services providers.
Industry analysts have increasingly pointed to a long-term shift in hiring strategy across Indian IT firms, with companies accelerating:
- Local hiring in the United States
- Nearshore recruitment in Canada and Latin America
- Automation-led delivery models
- Offshore project execution from India
The pressure has also intensified as clients demand cost efficiency while simultaneously investing in artificial intelligence, cloud infrastructure and automation projects.
Infosys emerges as an exception
Among the major Indian IT firms, Infosys reportedly stood out as the only company to post an increase in H-1B approvals during FY26.
While the report did not specify the exact reasons behind the rise, the divergence suggests differences in salary structures, visa strategies and workforce localisation efforts across companies.
Several Indian IT firms have spent recent years reducing dependence on H-1B visas by building larger local workforces in the US following political scrutiny during previous immigration crackdowns.
That transition accelerated after the Covid-19 pandemic, when remote delivery models became more widely accepted across global technology contracts.
Pressure builds on India’s outsourcing model
The sharp fall in H-1B approvals arrives at a time when India’s IT services sector is already navigating slower discretionary technology spending and uncertainty around global economic growth.
For Indian outsourcing giants, the US remains the single largest market, contributing a major share of revenue across banking, healthcare, retail and enterprise technology services.
Any sustained tightening of visa access could force companies to further redesign their workforce structures and delivery economics.
The shift may also accelerate investments in AI-driven software development and automation tools as firms attempt to maintain margins while reducing dependence on international mobility programmes.
Even so, analysts expect Indian IT companies to continue adapting through localisation strategies, strategic acquisitions and increased offshore execution capabilities as the sector adjusts to a changing US immigration landscape.