H-1B Visa Slowdown Hits Top IT Firms: TCS Worst Hit, Infosys Gains – Is The American Dream Fading?

US H-1B visa crackdown: Indian IT faces a new reality as TCS, Infosys and peers rethink the American dream. An H-1B visa has historically been one of the most visible milestones in the careers of employees of India’s largest technology services companies. But that route appears to be closing in. New US immigration figures reveal that H-1B visa approvals for India’s six largest IT services firms declined steeply in FY26, mirroring tighter visa scrutiny, shifting hiring economics and a wider push for local hiring in the US. The drop comes as Indian IT companies face sluggish global technology spending, margin pressure and rising compliance costs.

The change could affect how Indian IT companies deploy talent globally – accelerating offshore execution from India while reducing US onsite staffing.

H-1B Filings Have Fallen By Nearly 40%; What Happened?

H-1B programme registrations for fiscal year 2027 dropped 38.5% year-on-year, according to US immigration data.

The H-1B programme allows US employers to hire foreign professionals in specialised fields such as software, engineering and technology services. Applications always exceed the number of permits available each year, so a lottery system is used to make selections.

US officials said the lower registration figures reflected efforts to prioritise highly skilled workers and curtail what they called ‘excessive volume-based filings’.

The numbers of approvals show the impact on India’s IT sector.

Biggest IT Firms In India Hit By H-1B Approval Slowdown

India’s six biggest IT services companies had together won 11,041 H-1B approvals as of March 31, 2026. This is down from 18,469 approvals a year earlier and a decline of nearly 40%, Mint reports.

Among the six companies, Infosys was the only top IT services firm in India to see a rise in H-1B approvals in FY26, with 3,195 approvals, the highest among the six and an improvement over the previous fiscal year. On the other hand, TCS was the biggest loser in the group, with approvals plunging to 2,885.

The other companies – including Cognisant, HCL Technologies, Wipro and Tech Mahindra – also witnessed a year-on-year decline in H-1B approvals, underscoring the overall slowdown in visa access for India’s IT outsourcing sector as the US tightens its immigration and hiring policies.

Why TCS And Peers May Have To Revisit US Strategy

The H-1B slowdown is part of a broader tightening of US immigration policy.

Recent policy proposals and measures have put additional pressure on foreign worker programmes through:

• More scrutiny of H-1B filings
• New visa applicants’ wage expectations are higher
• Stricter green card rules
• More focus on protecting wages and jobs at home

For Indian IT companies, the evolving US immigration scenario may hasten offshore work from India, spur quicker local hiring in the US, curtail opportunities for employees to be deployed onsite, and raise operating costs throughout North America. The pressure is compounded by the fact that changes to the rules for green cards could cause more uncertainty for professionals who depend on long-term US work and residency pathways.

Green Card Rule Changes Heighten The Pressure

But temporary work visas aren’t the only problem. New US developments on green card processing could add to the confusion for long-term H-1B holders, particularly professionals from countries such as India where permanent residency queues already stretch for years.

This is especially the case for employees who are contemplating several years working in the U.S., as this raises issues around when to move, career progression and planning for long-term residency.

What Investors And Employees Need To Watch Next

The immediate market impact may not be visible overnight, but structurally this could impact hiring models, utilisation rates and margin profiles across Indian IT services.

Investors will probably follow US hiring commentary in quarterly earnings reports, patterns of employee utilisation, and Visa operating expenses. 

The bigger question now is not whether Indian IT can adapt but how quickly it can reshape its global delivery model for a tougher immigration environment.

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