Motorists move past an advertisement of a visa consultancy office in New Delhi, India, September 22, 2025. REUTERS/Adnan Abidi

(Reuters) -The Trump administration's proposed $100,000 fee for new H-1B visas widely used by tech firms to hire foreign talent could deal a blow to the sector that relies heavily on skilled workers from India and China.

The announcement prompted some big tech companies and banks to warn employees to stay in the U.S. or quickly return. India was by far the largest beneficiary of H-1B visas last year, accounting for 71% of approved beneficiaries.

Here are some analysts' views on the implications of the policy:

BENJAMIN JANG, PORTFOLIO MANAGER AT NICOLA WEALTH MANAGEMENT

"The tech companies have high exposure to foreign skilled labor and the concern is on margin compression and operational disruption going forward. This may impact the number of talented individuals globally that enter into the U.S. market so there could be a really tight bottleneck situation that leads to upward wage pressures."

"The long-term focus obviously what President Trump wants is to have the acceleration of local hiring which may occur, but that is a long-dated item."

"In the medium term, there's potential for U.S. tech to kind of lose their pole position in terms of being global innovators. Obviously countries with more favorable immigration may benefit from that."

COLIN SEBASTIAN, ANALYST AT BAIRD "While the new tax instituted by the White House will cost larger companies such as Amazon, Google and Meta hundreds of millions, or even billions of dollars, the more likely unintended consequences of the new policy could be to starve emerging and small U.S. businesses of qualified workers, and to push some companies to shift research and engineering centers to locations such as Toronto, London and Bangalore."

DERREN NATHAN, HEAD OF EQUITY RESEARCH, HARGREAVES LANSDOWN

"While the H-1B applies to less than 1% of the American workforce, it's a segment that punches above its weight when it comes to driving innovation"

BERNSTEIN ANALYSTS

"From an industry perspective, the massive fee increase in the H-1B visa application fee can increase pressure to hire local resources, in our view. This will also accelerate the use of Generative AI/agentic AI to limit the potential salary increase due to scarcity of IT resources. We expect U.S.-based technology providers to actively lobby the US administration to soften the impact."

TD COWEN ANALYSTS

"When it rains, it pours. This among the last things that Services sector sentiment needed amid persistent cyclical pressure weighing on growth from geopol/macro uncertainty and structural concerns caused by GenAI. It's also a detriment to Big Tech & certain Fin Services co's that are among the largest H-1B program users."

STIFEL ANALYSTS

"We expect the IT services companies will likely increase the ratio of offshore content if the policy persists. Currently, 70-80% of work in these models is performed offshore, though we believe this ratio could migrate to 90% (offshore)/10% (onshore) overtime".

BERENBERG ANALYSTS

"By making it very expensive for companies to attract foreign talent, and by forcing some international students to leave the country after graduation, the brain drain will weigh heavily on productivity,"

ARTHUR R HOGAN III CHIEF MARKET STRATEGIST, B.RILEY

"Fee is going from $1000 to $100,000, a massive increase that will have many companies rethinking their use of H-1B visas to fill highly skilled positions. The theory by the administration is that could move companies to hire more US graduate students. The problem is that there is a mismatch in new graduates with the skills needed to fill the number of jobs that are open."

"Companies will need to recalibrate how they fill those high skill roles, but with the new tariff roll out, it will likely not drive a movement of offshoring. The new H-1B program will certainly move prices higher, much like the trade and tariff policy has."

(Compiled by Rashika Singh, Joel Jose, Akriti Shah and Twesha Dikshit; Editing by Anil D'Silva)