Given that Indian IT services companies have become less dependent on H-1B visas over the past ten years due to increased localization and outsourcing, the impact of the $100,000 increase in the application cost is anticipated to be minimal, according to a report released on Tuesday.

The medium-term effects, however, might be more noticeable. According to a Franklin Templeton analysis, the high cost of delivery in the US may result in a substantially higher cost base, forcing businesses to review their operating models and look into mitigating measures.

A company’s exposure to the US, the makeup of its onsite staff, and its reliance on non-local expertise could all affect how much of an impact it has.

Historically, executive measures have been more responsible for visa-related issues than legislative changes, and earlier stages of visa tightening already saw an increase in cost constraints. Crucially, supply-side disruptions typically cause more harm in high-growth settings, which are not the case at the moment.

The earliest significant impact is probably going to be seen in FY27 petition cycles, since H-1B lotteries and petitions normally take place in Q4–Q1.

According to the survey, providers are anticipated to respond by increasing offshoring, growing nearshore operations in Canada and Mexico, pursuing acquisitions in Europe and APAC to broaden their geographic diversification, and investing in automation and artificial intelligence to boost efficiency.

As onsite possibilities decrease and customers want greater rate realization and efficiency improvements, these changes are likely to make Global Capability Centers (GCCs) in India more alluring to talent.

Although there may be some short-term volatility in India’s equities markets, overall values are still high when compared to historical averages.

However, because of the poor demand outlook, IT industry valuations have changed during the past six to twelve months.

A resurgence in domestic consumption and a slow increase in private sector capital expenditure are helping to improve the outlook for overall corporate earnings in Indian markets.

“India’s macroeconomic fundamentals remain resilient, even though global risks like US tariffs present short-term challenges for export-driven sectors,” the paper stated.

According to the report, the market may benefit from the possible signing of a trade deal with the US in the second half of 2025, as well as increased domestic demand and better earnings visibility in the upcoming quarters.