President Donald Trump's recent decision to impose a $100,000 annual fee on new H-1B visa applications has sent shockwaves through India's $283 billion IT services sector, which relies heavily on U.S. contracts.  This move threatens to upend the operational model of Indian IT firms that depend on sending skilled professionals to the U.S.

The steep fee, which surpasses the annual salary of many entry-level tech workers, may render it financially unfeasible for companies to sponsor H-1B visas. In response, firms are considering alternatives like L-1 visas or expanding offshore delivery capabilities. Some may even contemplate shifting entire operations back to India or to nearshore locations such as Mexico and Canada.

While the fee applies only to new applicants, existing H-1B holders are also affected, as the policy could disrupt their ability to return to the U.S. after travel. 

This development could accelerate the growth of Global Capability Centers (GCCs) in India, potentially leading to the creation of over 2,200 centers by 2030, contributing up to $100 billion to the market and generating 2.8 million jobs.