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Indian IT services companies are not responding to tighter U.S. visa rules with one blanket move. They are combining three levers: hiring more employees who already have U.S. work authorization, delivering a larger share of suitable work from India, and expanding nearshore teams in countries such as Canada, Mexico and Brazil. The mix varies by client contract, role, security requirement, time-zone need and local talent supply.
The result is a more distributed delivery model. Visa-dependent travel is reserved for work that genuinely needs a U.S. presence, while repeatable engineering and support work moves to established offshore or nearshore centers. This can reduce immigration exposure, but it also introduces recruiting, compliance, coordination and retention challenges.
What changed in U.S. H-1B policy in September 2026?
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 exceptions in the proclamation. The rule 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 Secretary of Homeland Security may exempt an individual, all workers at a company, or an entire industry when an exemption is judged to serve the national interest without threatening U.S. security or welfare. That discretion means companies cannot treat the headline fee as the only variable; eligibility, timing, documentation and implementation guidance still matter.
Selection and processing figures reported by the White House
The White House says the fiscal-year 2027 weighted selection process gives greater priority to higher-skilled and higher-paid applicants. It also reports that combined H-1B registrations from the largest IT staffing and outsourcing firms fell from 24,946 to 2,055, a 92% decrease, and that consular-processing requests declined by nearly 97% between fiscal years 2025 and 2027. These are administration-reported comparisons for the periods stated; they are not, by themselves, proof that the proclamation caused every change or that all Indian IT companies reduced hiring by the same percentage.
Why visa tightening changes the delivery equation
Traditional Indian IT delivery has often separated work by location. Routine development, testing, maintenance and back-office operations can be performed from India, while experienced engineers travel to client sites for architecture, complex troubleshooting, stakeholder meetings and relationship management. When travel becomes more expensive or uncertain, that separation has to be redesigned.
A company now has to price the immigration exposure attached to each assignment. A U.S.-based consultant may be essential for a regulated client or a major transformation, but sending an India-based employee can require a payment, additional documentation and processing time. A local hire avoids that immigration step but may cost more in salary and benefits. An offshore team may be less expensive but could face client-security rules, time-zone friction or limits on handling sensitive data. A nearshore team can bridge working hours, yet its labor market and legal environment differ from both India and the United States.
These are portfolio decisions rather than a single industry policy. Two firms serving different sectors can reach opposite conclusions even when they face the same proclamation.
The three staffing levers companies are combining
1. Increase U.S.-based local hiring
Local hiring means recruiting people who already possess the authorization needed for the role, including U.S. citizens, permanent residents and other workers with valid status. It reduces dependence on new H-1B entries and makes client-site coverage easier to plan.
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- Client access: Employees can work at a customer location without waiting for a new visa entry, subject to the person’s specific authorization and the contract.
- Continuity: Teams are less exposed to consular delays, travel restrictions and petition rejection.
- Commercial credibility: A visible U.S. workforce can satisfy procurement requirements for domestic presence and improve executive and account coverage.
- Trade-offs: U.S. compensation, benefits, recruiting fees and retention costs are generally higher than for equivalent offshore roles. Local talent may also be scarce in specialties such as cloud security, semiconductor engineering or advanced data platforms.
Localization does not mean every task moves to a U.S. office. Firms commonly place account leaders, solution architects, program managers and specialists near customers while keeping larger build-and-run teams elsewhere.
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Offshore delivery remains the most direct way to reduce the number of workers who need to enter the United States. Mature cloud tooling, secure remote access and distributed agile practices allow more design, coding, testing, monitoring and service management to stay in India.
The practical limit is not simply whether a task can be done remotely. Contracts may require data to remain in a particular country, and regulated customers may restrict access from outside their jurisdiction. A team also needs enough overlap for incident response and decision-making. Companies therefore tend to offshore work with repeatable processes, well-defined interfaces and strong documentation, while retaining a smaller local layer for escalation and governance.
3. Build nearshore capacity in the Americas
Nearshore centers in countries such as Canada, Mexico and Brazil offer a middle option. They can provide overlapping business hours with U.S. customers, reduce travel distance and create a regional talent pool without requiring every specialist to obtain U.S. work authorization.
Nearshore delivery is not automatically cheaper or simpler. Hiring markets differ by city and skill, employment rules vary, and a center may need its own security controls, managers and career paths. The model works best when a company has enough regional demand to keep teams occupied and when work can be standardized across locations.
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| Delivery location | Best suited to | Main advantage | Typical constraint |
|---|---|---|---|
| United States | Client leadership, regulated work, on-site architecture, executive engagement | Immediate customer access and no new H-1B entry for an already authorized hire | Higher labor and retention costs; local skill shortages |
| India | Engineering, testing, operations, analytics and repeatable support | Large established talent base and reduced dependence on U.S. immigration | Data-location rules, time-zone overlap and customer security requirements |
| Canada, Mexico or Brazil | Regional delivery, bilingual support, follow-the-sun operations and time-zone-sensitive work | Closer working hours and geographic diversification | Different labor, tax and immigration regimes; capacity must be sustained |
What company disclosures indicate
Reported examples show the direction of travel, but they are not a standardized industry census. The Indian Express relayed the following company statements and figures:
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| Company | Reported staffing detail | How to interpret it |
|---|---|---|
| HCLTech | Its fiscal 2026 annual report was described as saying approximately 80% of its U.S. workforce was locally hired. | A company-specific U.S. localization measure, not a comparison of total visa dependence across providers. |
| Tech Mahindra | Reportedly said fewer than 1% of its global workforce was on H-1B visas and that it was expanding in Canada, Mexico and Brazil. | Global workforce share and regional expansion are separate indicators; the figure does not describe every U.S. role. |
| 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 proof that all work can move out of the United States. |
| Wipro | Was reported as saying more than 80% of its people were localized and citing about 250 H-1B workers over five years. | The localization and five-year H-1B counts use different denominators and should not be combined into a workforce percentage. |
These statements were reported by a secondary source and should not be treated as audited, cross-company measurements. Companies generally do not publish a complete workforce breakdown by immigration status, location, role and authorization type.
What the H-1B approval numbers do—and do not—show
National Foundation for American Policy analysis of U.S. Citizenship and Immigration Services 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 2025. That flow was 70% below fiscal 2015 and 37% below fiscal 2024.
“Initial employment” is a new-approval category. It is not a count of all current H-1B employees, extensions, transfers or other visa holders. A lower annual approval flow can coexist with a substantial existing U.S. workforce, and it cannot establish how much revenue or delivery capacity depends on visas. Any board or procurement analysis needs the company’s own role, location and authorization data.
How a company decides where each role belongs
A practical staffing review starts at the role and project level rather than with a country quota. Leaders can score each position against five questions:
- Is physical presence required? Check contract language, customer-site duties, regulated activities, equipment access and security classification.
- Does the worker need U.S. work authorization? Separate a new U.S. entry from an employee who already has unrestricted authorization. Confirm the exact status with qualified immigration counsel.
- Can the work be performed securely from India? Test data-residency, identity, network, segregation and incident-response requirements instead of assuming remote access is permitted.
- Would a nearshore location improve delivery? Compare time-zone overlap, language capability, local talent, travel routes and the scale needed to support a stable team.
- What is the failure cost? Model project delay, petition rejection, replacement hiring, attrition, compliance penalties and customer dissatisfaction alongside salary and travel expense.
The output should be a blended plan: a local customer-facing layer, an offshore execution core where allowed, and nearshore capacity for work that benefits from American time zones.
Implementation steps for a more resilient staffing model
1. Create an authorization and location inventory
For every U.S.-serving role, record the worker’s current location, work authorization, petition stage, client-site requirement, critical skills and replacement lead time. Keep immigration records separate from ordinary personnel data and restrict access appropriately.
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2. Classify work by mobility
Mark tasks as site-dependent, location-flexible or fully remote. Include security and contract restrictions. A role may be technically remote but contractually required to remain in the United States.
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3. Reserve scarce travel for high-value work
Use U.S.-based staff or authorized travelers for architecture decisions, executive governance, regulated operations and difficult escalations. Move repeatable build, test and monitoring work to locations with reliable capacity.
4. Build local and nearshore pipelines before demand peaks
Recruiting only after a visa delay occurs creates a staffing gap. Maintain relationships with regional universities, experienced-hire channels and specialist recruiters, and define which skills can be trained internally.
5. Standardize handoffs across time zones
Document ownership, escalation windows, runbooks, code-review rules and service-level responsibilities. Nearshore and offshore teams reduce visa exposure only when work can move between them without losing context.
6. Recheck policy and contracts continuously
The September 2026 proclamation is time-limited and implementation can change through agency guidance or court action. Immigration counsel should verify payment, exemption, filing and consular requirements before a petition or travel decision. Account teams should also review customer clauses when work location changes.
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Business risks that remain after localization
Localization lowers one category of immigration exposure but does not eliminate operational risk. A U.S. hiring surge can raise salary pressure and turnover. Offshore expansion can trigger customer objections or data-transfer controls. Nearshore centers can suffer from thin local talent markets if several providers recruit at once.
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Infosys’s fiscal 2026 Form 20-F lists immigration-law changes, interpretation, enforcement, fee increases and delays as risks that may increase compliance costs, disrupt service, impede bids or project delivery, create penalties, raise rejection rates and produce staffing shortages. It also notes that significant portions of its employees in the United States, United Kingdom, European Union and other regions rely on work visas and permits. This is a company risk disclosure, not a quantified forecast for the wider industry.
Management should therefore track more than visa approvals. Useful indicators include the percentage of client-facing roles already locally authorized, time to fill U.S. and nearshore vacancies, work successfully transferred offshore, projects blocked by location rules, petition and consular lead times, regretted attrition and the cost of maintaining duplicate delivery capacity.
What clients and employees should expect
For U.S. clients
Expect more proposals to identify the location and authorization status of key roles. A provider may offer a U.S.-based account and architecture team with delivery from India or Latin America. Ask how incident coverage, data access, substitution and escalation work if a traveler cannot enter the country.
For employees in India
Fewer new U.S. assignments do not necessarily mean less work. Demand can shift toward remote delivery, platform engineering, security, automation and leadership of distributed teams. However, roles designed mainly around U.S. travel may require retraining or a different career path.
For employees in the United States and nearshore centers
Hiring demand may increase for customer-facing engineering, program management, compliance, cybersecurity and specialized consulting. Those roles also carry greater expectations for client communication and retention, making career development and workload design important.
Bottom line
Tighter H-1B entry rules push Indian IT companies toward a hybrid staffing architecture, not a simple choice between “offshore” and “hire locally.” The strongest response is to localize roles that require U.S. presence, keep secure and repeatable work in India, and use nearshore hubs where time-zone coverage and regional talent add value. Because the proclamation, court status and agency procedures can change, every staffing plan should be reviewed against the current official rules before a petition, filing or international assignment.
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