The landscape of H-1B visa dependency is shifting in the Indian IT sector, with major companies like Tata Consultancy Services (TCS), Infosys, HCL Tech, Wipro, and Tech Mahindra reducing their reliance on foreign visas to deploy their workforce in North America. As of 2024, these companies reported having less than 50% dependency on H-1B visas, a significant drop from previous years.
Top 5 Indian IT Companies Have Less Than 50% Dependency on H-1B Visas.
This article explores how the H-1B visa dependency of Indian IT companies is evolving, and what it means for the future of the tech industry in both India and the United States. We’ll also dive into the factors that have led to these changes and the impact on hiring strategies moving forward.
Why Indian IT Companies Are Reducing Their H-1B Visa Dependency
Historically, Indian IT companies have been major players in the H-1B visa sponsorship space, securing a substantial share of the total approved visas in the U.S. However, as immigration policies evolve, many of these companies are rethinking their strategies. Here’s why:
1. Increased Local Hiring in the U.S.
Indian IT giants like Infosys and TCS are now hiring more locally within the U.S. to reduce their dependency on H-1B visas. TCS, for example, has stated that more than 50% of its U.S. workforce is now made up of local hires, as opposed to foreign workers. Similarly, Infosys has reduced its on-site mix of employees, with only 24% of their U.S. workforce on H-1B visas, down from 30% in previous years.
2. Adapting to Changing Immigration Policies
With the uncertainty surrounding U.S. immigration policies under the Trump administration, many Indian IT companies are looking to minimize their risk by diversifying their hiring practices. This approach ensures they are not overly reliant on a visa category that could face tighter restrictions or policy changes.
3. Economic Recovery and the Need for Local Talent
As the U.S. economy continues to recover from the pandemic, the demand for specialized tech talent, particularly in areas like AI, cloud computing, and cybersecurity, has soared. To meet these demands, IT companies have increased their focus on hiring local workers who can quickly adapt to the fast-evolving tech landscape.
Breakdown of H-1B Visa Dependency Among Top Indian IT Companies
Let’s take a closer look at the H-1B visa dependency for each of the top five Indian IT service providers:
1. Tata Consultancy Services (TCS)
TCS, India’s largest IT services exporter, generates nearly 50% of its revenue from North America. However, over 50% of its U.S. workforce is now comprised of local employees. Despite a still significant demand for H-1B visas (around 3,000-4,000 annually), TCS has minimized its reliance on these visas. The company is confident that it can offset any decrease in H-1B approvals with other methods, such as shifting work to India.
2. Infosys
Infosys has also reduced its reliance on H-1B visas, with more than 60% of its U.S. workforce now consisting of local hires. Infosys’ H-1B dependency has dropped from 30% to 24% in recent years, signaling a shift towards more sustainable hiring practices in North America.
3. HCL Tech
HCL Tech boasts one of the lowest H-1B visa dependencies among Indian IT companies, with only 20% of its U.S. workforce on H-1B visas. The company hires extensively from the U.S. labor market, with 80% of its U.S. employees being locals. HCL Tech’s efforts to reduce visa dependency align with the broader trend of leveraging local talent to fill tech roles.
4. Wipro
Like HCLTech, Wipro maintains a relatively low dependency on H-1B visas, with only about 20% of its U.S. workforce on these visas. Wipro’s strategy focuses on hiring locally in the U.S., ensuring a strong on-site workforce capable of meeting client demands efficiently.
5. Tech Mahindra
Tech Mahindra, while still heavily reliant on the U.S. market, has also reduced its H-1B visa dependency to approximately 30%. The company has built a large local workforce and operates near-shore delivery centers to support its U.S. clients, thereby reducing its overall visa reliance.
The Rising Demand for H-1B Visas
Despite the reduced dependency on H-1B visas by major Indian IT companies, the overall demand for these visas continues to grow. According to USCIS data, the fiscal year 2024 saw a 3.1% increase in H-1B visa applications. The primary driver of this demand is the ongoing digital transformation across industries, which has led to an increased need for specialized talent in STEM fields like software development, AI, and cloud computing.
This rise in demand is also influenced by a skill gap in the U.S. job market, where tech companies are struggling to fill critical positions with local talent. Staffing firms report that U.S. companies are increasingly turning to foreign talent to fill high-skill roles, particularly in emerging fields like AI and cybersecurity.
The Future of H-1B Visas and the Indian IT Sector
Looking ahead, the future of the H-1B visa program remains uncertain, with potential policy changes under the Biden administration. Despite this, Indian IT companies have already started adapting by diversifying their workforce and focusing on local talent pools.
Companies like Infosys, TCS, and Wipro are well-positioned to navigate these changes with their strong local presence in the U.S. The ongoing trend toward reducing H-1B dependency, while continuing to meet the growing demand for specialized skills, will likely become the new norm in the industry.
Moreover, the growing emphasis on near-shore delivery centers and increasing local hiring in key markets will help Indian IT companies remain competitive and resilient in the face of changing visa landscapes.
Navigating the Changing H-1B Landscape
The evolving landscape of H-1B visa dependency among Indian IT companies reflects the sector’s adaptability in response to shifting U.S. immigration policies. As the demand for specialized tech talent continues to rise, companies are increasingly focused on local hiring and innovative workforce solutions to meet the needs of the North American market.
For Indian IT service providers, this shift offers an opportunity to diversify their recruitment strategies, while maintaining their competitive edge in the global IT services market.
