An Emkay report has warned that India’s IT services export growth could fall below 4 per cent due to fresh risks from US President Donald Trump’s decision to raise the H-1B visa fee to $100,000. Emkay had earlier projected 5 per cent growth in FY26 and a 7 per cent CAGR over the next five years.

It stated, “Indian IT/software gross/net exports stood USD 181bn/160bn in FY25 and we had assumed 5 per cent growth in net IT services exports for FY26E, with a 7 per cent CAGR growth for next 5 yrs. This could reduce to sub-4 per cent depending on sustained H1B visa-led risks and GCC evolution”.

India’s IT and software exports touched USD 181 billion gross and USD 160 billion net in FY25, with global capability centres (GCCs) contributing over USD 65 billion of the gross exports.

The report said that how GCCs evolve and IT firms adopt new growth models will be crucial for the sector’s future. Experts added that the immediate impact on revenues and margins may be limited, but if the higher H-1B fees continue, they could disrupt traditional export models.

Madhavi Arora – Chief Economist, Emkay Global stated, “Near-term impact may be limited on IT revenue/margins. However, if sustained, it could disturb Indian IT exports, companies’ traditional models, pressurise project margins, disrupt Indian IT supply chains and on-site projects. That said, shift in delivery and export model over time towards offshoring could also provide IT export offsets”.

The US recently hiked H-1B visa fees for new applications to USD 100,000, up from the previous USD 1,500-4,000. Existing visa holders and renewals are not affected, but the steep increase could hit Indian IT companies that rely on new on-site visas.

Nilesh Shah, MD Kotak Mahindra AMC stated, “US restrictions on H 1 B visa will hurt Indians more than Indian IT services companies. We have to create ecosystem in India so that our talent doesn’t have to go abroad. Hand cuffing Korean workers, abruptly changing H 1 B visa kind of steps will have adverse effects on US economy over a period of time”.

Over time, companies might try to ease the impact by moving more work offshore, but risks could grow if the proposed HIRE Act becomes law.