Indian IT companies are pulling back on fresh H-1B visa applications for the United States as higher costs, changes to the lottery system and the growing use of artificial intelligence reshape the way companies plan their U.S. workforce.
The number of eligible H-1B registrations fell 38.5% to 211,600 for fiscal year 2027, which runs from October 1, 2026, through September 30, 2027, down from 343,981 a year earlier, as per the data from the U.S. Citizenship and Immigration Services (USCIS).
The FY27 figure is the lowest in at least seven years. H-1B registrations had reached a high of 758,994 in 2024, highlighting how sharply demand for the temporary work visa has changed in just a few years.
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The decline comes as Indian technology companies reassess a hiring model that has relied heavily on bringing skilled workers to the U.S. on H-1B visas. Higher visa-related costs introduced under the Donald Trump administration, along with changes to the selection process that give greater weight to higher-paid positions, have made the traditional route more expensive and less predictable for employers.
Immigration lawyers say the changes are forcing companies to take a closer look at whether they need to sponsor workers for U.S. positions or can instead rely on local hiring, offshore teams and technology.
“…the dip in volume was also partially because of the surge in the use of AI solutions and because of changes to the lottery system,” said Poorvi Chothani, Managing Partner at LawQuest.
The increasing use of AI is emerging as another factor in the changing demand for H-1B workers. Companies are increasingly using AI tools to automate tasks and improve productivity, which could reduce the need for some roles that were previously filled through overseas hiring.
At the same time, employers are facing the possibility of additional costs when existing foreign workers seek to extend their visas.
Chothani recently pointed to a proposed Department of Homeland Security rule that could expand the 9-11 Response & Biometric Entry-Exit Fee to certain H-1B and L-1 extension petitions.
If finalized, the proposal would require covered employers to pay an additional $4,000 for qualifying H-1B extension petitions and $4,500 for qualifying L-1 extension petitions. The proposed fees would apply to certain employers with at least 50 workers where at least half of the workforce is in H-1B or L-1 status.
Importantly, the proposed charges would not be limited to new petitions or change-of-employer filings. They could also apply to routine visa extensions.
While employers, rather than workers, would be responsible for paying the proposed fees, the added cost could still influence decisions around visa renewals, hiring and long-term sponsorship.
The issue is particularly significant for Indian professionals. According to Chothani, Indian nationals account for 77.6% of H-1B renewals, making them the group most exposed to potential changes in employer sponsorship costs.
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The proposed DHS rule has not been finalized. Existing H-1B and L-1 approvals remain valid, and current filing requirements continue to apply unless and until the agency issues a final rule.
For Indian IT companies, however, the sharp fall in new H-1B registrations signals a broader shift. Rising immigration costs are being weighed alongside salary requirements, changes in the lottery system and the rapid adoption of AI, as companies rethink how much of their US workforce needs to be brought in from abroad.
The FY27 numbers suggest that the H-1B visa may still be central to the U.S. technology industry, but Indian IT companies are becoming more selective about when and where they use it.