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Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Indian IT services firms are responding to tighter U.S. visa rules with a hybrid staffing model: more employees hired in the United States, more work delivered from India, and expanding nearshore teams in countries such as Mexico, Canada and Brazil. Visa sponsorship remains one tool, but it is no longer the default way to place every project specialist at a U.S. client site.
What the 2026 U.S. policy changes actually do
The White House proclamation issued on September 18, 2026, restricts entry for certain H-1B specialty-occupation workers when a covered petition is not accompanied or supplemented by a $100,000 payment, subject to stated exceptions. It took effect at 12:01 a.m. Eastern Daylight Time on September 21, 2026, and is scheduled to expire after 12 months unless extended.
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The text applies to covered people entering or attempting to enter the United States after the effective date, including certain cases involving consular notification. It does not state that every person who already holds an H-1B visa must leave the country. Employers must keep evidence that the payment was made before filing, and the State Department is directed to verify payment during visa processing.
The Secretary of Homeland Security may exempt an individual, all workers at a company or an entire industry when the secretary determines that an exemption serves the national interest and does not threaten U.S. security or welfare. Because implementation, court orders and agency guidance can change, employers should check the current proclamation, Federal Register notices and adjudication instructions before filing or arranging travel.
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Selection is also becoming more weighted toward pay and skill
The White House says the fiscal-year 2027 weighted selection process gives greater priority to higher-skilled and higher-paid applicants. The administration reported that combined H-1B registrations from the largest IT staffing and outsourcing firms fell from 24,946 to 2,055, a 92 percent decline. It also reported that consular-processing requests dropped nearly 97 percent between fiscal years 2025 and 2027. These are administration-reported comparisons for the periods it identified; they are not, by themselves, proof that the policy caused every change in corporate hiring.
Why the old staffing pattern is under pressure
The conventional India-to-U.S. delivery model separated work by location. Routine development, testing, support and maintenance were performed in India, while experienced engineers traveled to a U.S. client site for architecture, complex integration, program leadership and relationship management. A visa allowed a firm to move a specialist when a project required physical presence.
Higher sponsorship costs, more selective admissions, longer processing uncertainty and the risk of a denied or delayed petition make that movement less predictable. Cloud platforms, secure remote access and client acceptance of distributed teams also mean that a larger share of technical work can be completed without relocating each worker. The result is not a single industrywide replacement of U.S. jobs with offshore jobs. It is a portfolio in which each activity is assigned to the location that best balances access, cost, security, time zones and immigration risk.
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1. Hire and develop more people in the United States
Local hiring avoids the need to obtain an H-1B for the employee, gives clients a readily available on-site contact and can strengthen relationships with regulators and procurement teams that value a domestic workforce. Firms can recruit experienced U.S. citizens and permanent residents, acquire local specialists through normal employment channels, and create graduate or apprenticeship pipelines.
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Localization is not cost-free. U.S. salaries, benefits, recruiting fees and retention packages are generally higher than comparable offshore costs, and some specialist skills remain scarce. Companies therefore tend to reserve local roles for client-facing leadership, regulated environments, security-sensitive work, product ownership and tasks that genuinely require physical presence rather than moving every position onshore.
2. Expand delivery from India
India remains the main offshore base for large Indian IT firms. A delivery center can provide engineering depth, shared tooling, follow-the-sun support and the ability to scale a project without waiting for an individual visa. Standardized development, quality assurance, analytics, infrastructure operations and managed services are especially suitable when the client permits remote execution and data can be handled under the required security controls.
Offshore delivery still has boundaries. Contractual rules, export controls, customer data residency, classified or regulated workloads, weak time-zone overlap and the need for hands-on equipment can require a U.S. presence. A project that is technically remote may also suffer if there is no local product owner or incident leader who can make decisions during U.S. business hours.
3. Build or use nearshore centers in the Americas
Nearshore teams in countries such as Mexico, Canada and Brazil provide closer time-zone alignment than India while avoiding the need to place every worker in the United States. They can handle application development, support, testing and service management that benefit from same-day collaboration with U.S. clients. A nearshore site can also become a regional hiring pool when U.S. talent is expensive or unavailable.
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Nearshoring introduces its own employment, tax, data-protection and immigration obligations. Talent depth varies by city and specialty, and a company must manage cross-border handoffs rather than assume that geographic proximity automatically produces better delivery. The strongest models define which work stays in India, which is performed nearshore and which must be U.S.-based.
What major firms have said about localization
The following examples were relayed by The Indian Express and describe individual company statements, not an audited comparison of the industry. Companies generally do not publish a consistent breakdown of their employees by immigration status.
| Company | Reported staffing detail | How to interpret it |
|---|---|---|
| HCLTech | Its fiscal-year 2026 annual report was described as saying that about 80% of its U.S. workforce was locally hired. | A company-specific U.S. localization figure; it does not show the share of all workers or the number of H-1B holders. |
| Tech Mahindra | Reportedly said less than 1% of its global workforce was on H-1B visas and that it was expanding in Canada, Mexico and Brazil. | A global workforce statement paired with a nearshore expansion strategy; the metric is not directly comparable with a U.S.-only localization rate. |
| TCS | Reportedly had more than 11,000 employees in Mexico and described Latin American hubs as time-zone bridges. | Shows the scale of one nearshore network, not the number assigned to any particular U.S. project. |
| Wipro | Was reported as saying more than 80% of its people were localized and citing approximately 250 H-1B workers over five years. | The wording and period are company-specific; it should not be treated as a standardized industry ratio. |
TCS chief human resources officer Sudeep Kunnumal was quoted by The Indian Express from a July–September fiscal-year 2026 earnings call: “We have significantly localised our workforce in the US…we believe our business model will be able to adapt quickly to any changes in immigration policy.” The quotation should be checked against the company’s transcript if exact punctuation or surrounding context matters.
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An analysis by the National Foundation for American Policy using USCIS data, as reported by The Indian Express, found 4,573 initial-employment H-1B petition approvals for seven large India-based IT companies in fiscal year 2025. That total was 70% below fiscal year 2015 and 37% below fiscal year 2024.
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Those figures count a flow of new initial-employment approvals. They do not count every current H-1B holder, extensions, transfers, other visa categories or the proportion of a company’s workforce that needs immigration sponsorship. A lower annual approval total therefore cannot be converted into a precise measure of a company’s total visa dependence.
How an IT company can redesign its delivery mix
- Map work by presence requirement. Classify each role as mandatory on-site, client-preferred on-site, or deliverable remotely. Include access to physical equipment, customer meetings, regulated data and incident-response obligations.
- Separate immigration need from skill need. Identify whether the required capability exists among U.S. hires, India-based employees or nearshore candidates. Do not assume that a role needs an H-1B merely because the project is sold to a U.S. customer.
- Model the full cost of each location. Include salary, benefits, recruiting, travel, facilities, security controls, management overhead, visa payments, legal work and the cost of a delayed start—not only the wage rate.
- Design a handoff architecture. Assign ownership for requirements, coding, testing, release management and production incidents across time zones. A local product lead and an India engineering pod may be more resilient than placing every function in one country.
- Set a sponsorship threshold. Reserve petitions for roles where a worker’s scarce expertise, customer requirement or leadership responsibility justifies the financial and timing risk. Maintain backup candidates who already have U.S. work authorization.
- Build regional redundancy. Place critical skills in at least two delivery locations where practical. A Mexico or Brazil team can cover U.S. hours while India maintains overnight engineering capacity; a U.S. team can retain client accountability.
- Review the mix quarterly. Track petition outcomes, processing time, attrition, utilization, incident response, customer satisfaction and the percentage of work completed without cross-border movement. Rebalance when policy or demand changes.
A practical decision framework for assigning work
| Question | If the answer is yes | Likely staffing response |
|---|---|---|
| Must the person access a U.S. facility, hardware or restricted system? | Physical or legal presence is required. | Use a U.S.-authorized employee; consider sponsorship only when local supply is inadequate. |
| Does the work involve daily customer decisions or executive communication? | High-touch interaction is central. | Place an account, product or program lead in the United States, with delivery support elsewhere. |
| Can data and tools be accessed securely from abroad? | Remote execution is contractually and technically permitted. | Use India or another offshore center for scalable engineering and operations. |
| Is same-day overlap important but U.S. hiring difficult? | India’s time difference creates avoidable delays. | Use a nearshore team in the Americas for support, testing or collaborative development. |
| Is the skill rare in every available labor market? | Recruitment is constrained geographically. | Compare a targeted visa petition with distributed delivery, internal training and a nearshore backup. |
| Would a one-week immigration delay stop a release? | The project has little schedule tolerance. | Staff a ready-to-work local or nearshore substitute and treat visa placement as an optional enhancement. |
Business effects and trade-offs
Compliance and delivery risk
Infosys’s fiscal-year 2026 Form 20-F lists immigration-law changes, interpretation, enforcement, fee increases and delays as risks. It says these conditions can increase compliance costs, disrupt service, impede bids or project delivery, create penalties, raise rejection rates and produce staffing shortages. The filing also notes that a significant portion of its employees in the United States, United Kingdom, European Union and other regions rely on work visas and permits. This is a risk disclosure, not a quantified forecast of revenue or margin impact.
Cost and pricing pressure
Local hiring can raise the direct labor cost of a project, while offshore and nearshore delivery may require more coordination, travel and security investment. A $100,000 payment attached to a covered petition changes the economics of moving an individual specialist, particularly when the assignment is short or the work can be redesigned for remote delivery. Firms may respond by pricing immigration exposure into bids, committing to local headcount or shifting standardized work to established centers.
Retention and capability
Localization can improve continuity for U.S. customers but may intensify competition for experienced engineers in American markets. Offshore centers retain scale and career paths but must offer meaningful technical work rather than becoming a low-value back office. Nearshore teams can help with time zones and retention, yet they need local managers, training and clear promotion routes.
What the shift means for projects and workers
For a cloud migration
A U.S.-based architect and security lead can handle customer approvals and regulated access, while an India team performs configuration, automation and testing. A nearshore operations team can cover the client’s working day and escalate to India overnight. This arrangement limits visa exposure without removing local accountability.
For application maintenance
Most coding and regression testing can remain in India when the contract allows offshore access. A U.S. service manager can own communication, while a nearshore help desk handles first-line incidents during U.S. hours. Sponsorship is less likely to be necessary unless a particular legacy system requires a scarce specialist.
For regulated or hardware-linked work
Data-residency rules, export controls, classified environments or physical equipment may require U.S.-based personnel. In these cases, offshore labor can support documentation and non-sensitive components only after the client and legal teams approve the division of work. A lower-cost location cannot override a contractual or statutory presence requirement.
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What customers should ask their IT provider
- Which project roles are U.S.-based, nearshore and offshore today?
- Which deliverables would continue if a planned visa is delayed or denied?
- Where is customer data stored and where can engineers access it?
- Who has authority to make release and incident decisions during U.S. business hours?
- What backup staffing exists if a location loses talent or becomes unavailable?
- How are immigration costs, travel and compliance changes reflected in the contract?
The strategic direction is clear even though the exact mix differs by company and project: Indian IT firms are reducing reliance on moving every specialist to the United States and increasing the use of local U.S. employees, India-based delivery and nearshore Americas hubs. The model is hybrid because each lever solves a different constraint—presence, scale, time-zone coverage or immigration risk.
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