India's six largest IT firms filed just 1,763 H-1B registrations for FY27, down from 21,919 a year earlier and fewer than Microsoft filed on its own. (Image Courtesy: X @WhiteHouse)
NEW DELHI: The first H-1B workers chosen under a new wage-weighted US selection system can begin employment from 1 October 2026. That same cap season saw India’s six largest IT services firms cut their registrations by about 92%, from 21,919 in FY26 to 1,763 in FY27, according to USCIS data reported by The Economic Times and The Hindu Business Line. The two developments are linked but distinct. One changed the odds, while the other reflects how companies chose to respond.
What changed and how
The Department of Homeland Security published its final rule on 29 December 2025, and it took effect on 27 February 2026, in time for the March registration window. It replaced the old random lottery, in which every beneficiary had an equal chance, with a system weighted by the Department of Labor’s four prevailing wage levels.
Under the rule, a Level I entry-level offer receives one entry in the selection pool, while Levels II, III and IV receive two, three and four entries respectively. Employers must declare the salary, occupation code, work location and wage level at registration. Notably, if several employers register the same person, USCIS uses the lowest wage level submitted. Any later drop below the declared tier can trigger requests for evidence or denial.
The effect on odds is stark. DHS projections put selection chances at about 15% for Level I, compared with roughly 61% for Level IV.
The numbers behind the drop
The decline ran across every major firm. Infosys cut registrations from 8,886 to 759, while TCS fell from 5,955 to 284. HCL America dropped from 3,855 to 387, and LTIMindtree from 1,211 to 178. Similarly, Wipro went from 985 to 112, and Tech Mahindra Americas from 1,027 to just 43.
The trend was not confined to Indian firms. IBM’s registrations fell by about 96% to 126, and Accenture’s by about 94% to 79. By contrast, Microsoft filed 2,481 registrations. Across the programme, total registrations fell 38.48%, from 343,981 to 211,600. Meanwhile, holders of US advanced degrees made up 71.5% of those selected, and Level I accounted for just 17.7%. USCIS reached the 85,000 cap on 17 July without a second round.
These figures describe registrations only. Petitions filed after selection and visas finally issued are separate stages, with outcomes yet to be fully published.
The cost stack
Costs pushed in the same direction as the odds. Presidential Proclamation 10973, issued on 19 September 2025, required a $100,000 payment for new cap-subject petitions for workers outside the US. A federal district court vacated the fee on 8 June 2026, and the First Circuit denied an administrative stay in July. However, the uncertainty during the March window shaped filing decisions, and the White House extended the proclamation in September. Premium processing now costs $2,965, while labour compliance audits of client-site deployments have intensified.
For junior and mid-level staff billed at standard rates, the combination of a potential $100,000 fee and a 15% selection chance made mass filing hard to justify.
Rewiring the delivery model
Importantly, fewer registrations do not signal shrinking business. India’s total services exports reached a record $421.3 billion in FY26. Instead, firms are reshaping where work happens. They are hiring more in the US through campus recruitment and transfers of workers already holding H-1B status, a route outside both the lottery and the fee. Additionally, they are using L-1 intra-company transfers, O-1A visas for top specialists and treaty visas where eligible.
Offshore delivery is expanding too, in hubs such as Bengaluru, Hyderabad and Pune and in centres like Coimbatore, Indore and Bhubaneswar. This shift predates the new rule. Indian IT firms’ share of H-1B approvals among the top 100 US sponsors fell from 34% in FY16 to 16% in FY26. NASSCOM President Rajesh Nambiar has said the industry no longer depends on H-1B visas, having built models around local hiring and offshore delivery.
Risks and open questions
The transition carries risks. Thinner onsite teams may slow urgent client projects, and clients may resist higher rates for local staff. Furthermore, global capability centres in India let clients run offshore work themselves, bypassing service providers.
Several questions remain open. The appeal over the $100,000 fee is unresolved. A Department of Labor proposal from 27 March 2026 would raise prevailing wage levels by 21% to 33%, pushing many current Level II offers into Level I. Finally, FY27 petition approval and visa issuance data have yet to show how many selections convert into actual workers.
What to watch
The FY28 registration window in March 2027 will show whether low filing is now the baseline. Quarterly results from TCS, Infosys and peers will reveal onsite-offshore mixes and North American margins. Meanwhile, appellate rulings and the wage proposal will shape the cost of future filings.
For Indian IT, the era of high-volume onsite staffing is fading. Encouragingly, the sector appears to be adjusting ahead of the rules rather than behind them, betting on fewer, higher-value people onsite and more engineering at home.
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