US HIRE Bill Unveils New Challenges for India’s Struggling IT Sector

November 9, 2025 - The proposed US HIRE (High-Skilled Immigration Reform and Employment) Bill introduces significant restrictions on H-1B visa-dependent companies, directly targeting India’s $245 billion IT services industry. This legislation emerges amid ongoing global economic uncertainties and technological shifts that have already pressured Indian IT firms to transform their business models away from traditional labor arbitrage approaches.

The bill specifically imposes higher salary requirements and stricter compliance measures for companies with more than 50 employees where over 50% are visa holders. This directly affects major Indian IT service providers whose business models have historically relied on placing technical professionals at client sites in the United States. The timing coincides with increased global competition and the rapid adoption of automation technologies.

📊 Facts & Data

The Indian IT industry employs approximately 5.4 million professionals directly and supports millions more indirectly. US markets contribute nearly 60% of the sector’s revenue, making visa accessibility critical for business operations.

H-1B visa statistics show Indian nationals received 72.6% of all H-1B visas approved in fiscal year 2023. The proposed bill would increase minimum salary requirements for H-1B workers from the current $60,000 to over $100,000 annually. Compliance costs for visa-dependent companies could increase by 40-60% under the new regulations.

🗣️ Reactions & Quotes

Industry association NASSCOM stated: “While we support fair immigration reforms, the proposed measures disproportionately target companies that have contributed significantly to US technological innovation and digital transformation.”

Infosys CEO Salil Parekh commented: “We’ve been preparing for such regulatory changes through increased local hiring and automation. However, transitional costs will impact short-term margins.”

US Senator Mark Warner (D-VA), a technology industry veteran, expressed concerns: “We need balanced immigration reform that protects American workers while recognizing the critical role skilled immigrants play in our innovation economy.”

🌍 Impact & Implications

The immediate impact includes increased operational costs for Indian IT firms serving US clients. Companies may need to accelerate local hiring in the US, increasing wage bills by 25-40%. Stock prices of major IT firms dropped 3-7% following the bill’s announcement.

Long-term implications include accelerated automation adoption and business model transformation. Indian IT companies must develop more IP-based solutions rather than labor-intensive services. The bill may accelerate the shift toward remote delivery models and nearshoring arrangements.

Global competitors in Canada, Eastern Europe, and Latin America could benefit as companies diversify geographic delivery capabilities. The Indian economy faces potential foreign exchange impacts given IT services’ significant contribution to export earnings.

📜 Background & History

India’s IT industry grew rapidly since the 1990s, leveraging cost advantages and technical talent to become global delivery leaders. The H-1B visa program, established in 1990, enabled this growth by allowing temporary employment of foreign professionals in specialty occupations.

Previous regulatory challenges include the 2017 “Buy American, Hire American” executive order and 2020 visa restrictions during the COVID-19 pandemic. Each challenge prompted industry adaptation through increased local hiring, automation, and geographic diversification.

The current bill represents the most comprehensive reform attempt since the 2013 comprehensive immigration bill that passed the Senate but stalled in the House.

Conclusion / What’s Next

The US HIRE Bill will undergo committee review and potential amendments before any Senate vote. Industry lobbyists from both US technology companies and Indian IT firms are engaging lawmakers to modify the most restrictive provisions.

Indian IT companies continue implementing contingency plans including increased US campus hiring, acquisition of US-based firms, and accelerated automation investments. The sector’s fundamental strengths in engineering talent and delivery excellence provide resilience, but the transition period will challenge profitability and growth metrics.

Investors should monitor quarterly earnings calls for updates on localization progress and margin impacts. Clients may experience short-term service disruptions as companies adjust their delivery models.

FAQs Section

What is the US HIRE Bill and how does it affect Indian IT companies? The US High-Skilled Immigration Reform and Employment Bill imposes stricter requirements on companies employing H-1B visa holders, including higher salary thresholds and compliance burdens. This directly impacts Indian IT firms that use these visas to service US clients.

How are Indian IT companies responding to these changes? Major firms are accelerating local hiring in the US, investing in automation technologies, developing more IP-based solutions, and expanding delivery capabilities in other geographic regions to reduce visa dependency.

What is the timeline for this legislation to become law? The bill must pass through committee review, Senate approval, House reconciliation, and presidential signature. This process typically takes 6-18 months, providing companies some time to adapt their strategies.