Companies likely to share the H1B visa incremental cost with clients at a 30

The US decision to impose a USD 100,000 fee on new H1-B visas for foreign workers will snip just 10-20 basis points from the operating margins of Indian information technology (IT) services companies next fiscal, with the pass-through estimated at 30-70 per cent, as per a Crisil Intelligence press release.

These companies, which had operating margins of ~22 per cent last fiscal year, are likely to share the incremental cost with their clients.

"The pass-through is estimated at 30-70 per cent. The reliance of IT companies on H-1B visas has been decreasing over the past few years. The trend began in 2018 when the denial rate increased to 24 per cent, leading firms to expand offshore delivery, open nearshore centres and hire locally in the US, even though the denial rate eased to three per