In December 2025, a US federal judge upheld the Trump administration's $100,000 H-1B visa fee, ruling it lawful. Indian IT stocks fell on the news, and the Nifty IT index slipped as investors priced in a genuine, ongoing cost burden.

In June 2026, a different federal judge — this time District Judge Leo Sorokin — struck the same fee down, calling it an unlawful tax that only Congress, not the President, had the authority to impose. His written ruling was direct: "The President had no power or delegated authority to impose a tax on H-1B petitions."

Two courts. Two rulings. Nine months apart. This is not a story with a clean ending yet — and understanding why requires walking through the whole timeline, not just the most recent headline.

In September 2025, the Trump administration signed a proclamation imposing a flat $100,000 fee on new H-1B visa petitions — a dramatic jump from the previous filing cost, which typically ran into a few thousand dollars including base fees and premium processing.

Who Is and Isn't Affected

The fee's scope matters more than the headline number. It applies specifically to new petitions filed after September 21, 2025 — not to visa renewals, not to existing H-1B holders already working in the US, and not to re-entries. This distinction, clarified by the White House after the initial announcement, meaningfully softened the panic in some quarters, though it did little to calm Indian IT investors initially, since new hiring is exactly how these companies deploy fresh talent onsite for client projects.

Indian professionals are the primary group affected by design as much as by outcome — roughly 70-75% of all H-1B visas issued annually go to Indian nationals, making this the single largest immigration policy story for Indian tech talent in years.

On September 22, 2025, the day after the fee took effect, Indian IT stocks fell sharply across the board. TCS dropped roughly 3% intraday, Infosys slipped between 1.9% and 2.6% depending on the exact reading, HCL Tech opened 1.5-2.5% lower, and Wipro declined over 2%. Tech Mahindra and LTIMindtree fell even harder, down 3.65% and 3.9% respectively.

Not every Indian IT company carries the same exposure to this fee. The numbers, compiled from US Citizenship and Immigration Services (USCIS) data, tell a fairly clear story about who has the most riding on the outcome.

TCS holds the largest absolute number of H-1B petitions among Indian IT majors, but Infosys shows a notably higher percentage of its new hiring pipeline running through the H-1B route — meaning a sustained fee could disproportionately affect Infosys's onsite staffing model even though its total headcount is smaller than TCS's.

This is where the story gets genuinely nuanced, because different brokerage houses have arrived at meaningfully different conclusions about the actual financial damage.

The More Cautious Estimates

IIFL Securities modelled the impact on EBIT margins at roughly 20-60 basis points, translating to an EPS hit of 1.2% to 4.5%, depending on how aggressively companies continue H-1B-based hiring. Nuvama's scenario analysis estimated a potential 50-150 basis point margin impact if firms continue using H-1B workers at the higher fee level. One analysis focused on onsite wage inflation warned that a resulting "talent supply crunch" could drag profits by as much as 4-13% in a worst-case scenario.

The More Optimistic View

JM Financial took a notably different stance, calling the development a potential "net positive" — arguing that regulatory uncertainty being resolved (in either direction) is better for markets than prolonged ambiguity, and that the actual margin impact would likely be negligible, in the range of just 15-50 basis points.

The Structural Counter-Argument

Perhaps the most interesting take came from MOFSL, which pointed out a structural offset most headlines miss: if fewer new H-1B visas are issued, onsite revenue may decline — but so do onsite costs, since offshore delivery from India is structurally more profitable than onsite US delivery in the first place. Under this view, the net effect on EPS could be close to neutral over the medium term, even if headline revenue growth slows somewhat.

As of mid-2026, here's the honest, current status: the June 2026 ruling that struck down the fee as an unlawful tax has been stayed pending appeal. In plain terms, that means the fee technically remains in effect right now, even though a federal judge has already ruled against it, because the losing side (the government) has appealed, and the stay keeps the original policy operative while that appeal plays out.

This is genuinely unusual for investors to price correctly, because it means the "good news" of the June ruling hasn't actually translated into relief yet — the practical, dollar-and-cents situation for IT companies filing new H-1B petitions today is unchanged from before the ruling.

Even if the fee itself is eventually struck down permanently on appeal, two legislative proposals in the US Congress could achieve a similar effect through a different route: the American White-Collar Worker Jobs Act and the End H-1B Visa Abuse Act. Both propose moving toward a wage-based visa selection system, which would prioritise H-1B applicants offered higher salaries — a change that would likely force Indian IT companies to raise onsite pay significantly to remain competitive in the visa lottery, achieving a cost increase through a different mechanism than a flat fee.

Neither bill has passed as of this writing, and legislative timelines in the US Congress are notoriously unpredictable — but their existence means that even a favourable final court outcome on the $100,000 fee wouldn't necessarily close the chapter on rising US hiring costs for Indian IT firms.

It's worth pausing on something easy to lose in a discussion of basis points and EPS estimates: this policy touches real people, not just portfolios. For the thousands of Indian families with a son, daughter, or spouse on an H-1B in the US, this uncertainty isn't an abstract market variable — it's a direct question about career stability, ability to change jobs, and in some documented cases, a brutal 60-day window to find new sponsorship after a layoff before facing an unviable $100,000 re-entry cost.

Readers of this article may well be in both camps at once — holding IT stocks in a portfolio while also having a family member navigating this exact visa uncertainty in the US. Both concerns are legitimate, and neither cancels the other out.

Resist the Urge to Trade the Headline

The single biggest mistake in a story like this is reacting to each individual headline as if it were the final word. This situation has already flipped once — from "upheld" in December to "struck down" in June — and the appeal process means it could plausibly flip again. Selling in a panic on bad news, or buying aggressively on good news, both risk reacting to a chapter rather than the ending.

Focus on the Structural Picture, Not Just the Fee

The MOFSL observation is worth taking seriously: a genuine, sustained shift away from onsite H-1B hiring and toward offshore delivery isn't automatically bad for margins — it may even help them, given offshore work's structurally better profitability. Investors overly fixated on the fee alone risk missing this more important structural trend already underway across the sector.

Watch FY27 Hiring Data, Not Just Court Filings

Since H-1B lotteries and petitions typically run in Q4-Q1 of the fiscal year, the real, measurable financial impact — as opposed to speculative brokerage modelling — will first show up clearly in FY27 petition data and subsequent quarterly commentary from company managements. That's the number worth tracking closely, more than any single court hearing date.