{"id":17145,"date":"2025-11-11T11:34:26","date_gmt":"2025-11-11T06:04:26","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=17145"},"modified":"2025-11-11T11:34:26","modified_gmt":"2025-11-11T06:04:26","slug":"h1b-visa-curbs-increase-it-subcontracting-costs","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/h1b-visa-curbs-increase-it-subcontracting-costs\/","title":{"rendered":"H-1B Visa Curbs Lift Subcontracting Costs for Indian IT Firms; Infosys Sees Steepest Rise"},"content":{"rendered":"

Tightening US H-1B visa rules and rising application fees are driving a sharp increase in subcontracting costs across India\u2019s top IT companies. Data from UnearthInsight shows Infosys recorded the steepest rise, with subcontracting expenses up 11.5% year-on-year, reaching 8.7% of total revenue in the September quarter (Q2 FY26).<\/p>\n

Meanwhile, Tech Mahindra reported a 10.3% increase in subcontracting costs as a share of revenue, but the company\u2019s year-on-year decline stood at 9.6%, indicating optimization efforts.<\/p>\n

By contrast, Tata Consultancy Services (TCS) maintained the lowest dependency on subcontractors, with such costs forming only 5% of its revenue. Except for TCS, all top eight IT majors saw a sequential increase in subcontracting expenses during Q2 FY26.<\/p>\n

Infosys Leads Increase in Subcontracting Expenses<\/h2>\n

The UnearthInsight report noted, \u201cInfosys recorded the sharpest rise, driven by demand for new-age AI skills and project-specific location requirements.\u201d<\/p>\n

Analysts said that demand uncertainties and short-term deal cycles are also influencing this trend. Companies are increasingly relying on short-term contractors instead of full-time hires to maintain flexibility amid fluctuating client demand.<\/p>\n

Also Read:<\/strong> Bajaj Finance Shares Fall After Q2 Results Despite Broadly Meeting Estimates<\/a><\/em><\/p>\n

Why Subcontracting Costs Are Rising?<\/h2>\n

The data linked the rise in subcontracting costs to tighter US visa norms, higher visa fees, and a growing emphasis on local hiring across global markets.<\/p>\n

UnearthInsight added, \u201cTech Mahindra\u2019s costs declined as it focuses on margin optimization, using consistent reduction in subcontracting as a key lever.\u201d<\/p>\n

Industry analysts pointed out that while H-1B visa restrictions contribute to this shift, they form only a small part of a broader trend driven by changing deal structures.<\/p>\n

\u201cH-1B changes are a minor factor \u2014 the main reason is that IT companies are signing shorter-duration contracts of 6\u20139 months, often linked to AI and transformation-led projects in the US and Europe,\u201d said Gaurav Vasu, Founder and CEO, UnearthInsight.<\/p>\n

IT Firms Prefer Contractors Over Full-Time Hires<\/h2>\n

According to Piyush Pandey, SVP – Institutional Equity Research at Centrum, \u201cCompanies are holding off on expanding full-time hiring until demand improves. When they see short-term spikes in demand for specialized skills, they\u2019re turning to subcontractors instead.\u201d<\/p>\n

This shift reflects a cautious approach to workforce expansion amid uncertain macroeconomic conditions and slower deal inflows.<\/p>\n

Company Commentary on H-1B Exposure<\/h2>\n

During their Q2 FY26 earnings calls, IT majors said they have significantly reduced reliance on H-1B visas over recent years:<\/p>\n