Morgan Stanley said the new $100,000 H1B visa application fee announced by the US government appears negative for Indian IT services firms at first glance, but the near-term impact will be minimal. The brokerage said companies are likely to absorb the changes in the short term without significant disruption.
In the medium term, however, the development could lead to structurally higher cost bases as companies rework their business models to reduce dependence on H1B visas. Morgan Stanley added that potential mitigants such as local hiring, nearshoring, and client-side cost sharing could help alleviate the overall impact.
It said the sector outlook remains anchored in the strength of digital demand, though uncertainties tied to geopolitical and regulatory changes are increasingly influencing investor sentiment.
Disclaimer: The views and recommendations made in this article are those of Morgan Stanley. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.