US visa restrictions, AI surge shape cautious outlook for Indian IT in 2026

India’s USD 280-billion IT industry heads into 2026, balancing visa-related headwinds and global trade uncertainty against its biggest-ever push into artificial intelligence and the rapid expansion of global capability centres (GCCs).

Heightened scrutiny of the US H-1B visa programme — including a proposed USD 100,000 fee for new visas and concerns over a potential 25 per cent outsourcing tax - has complicated cross-border delivery for Indian firms, even as companies accelerate efforts to reduce reliance on onsite staffing.

The US remains the sector's largest export market. The visa proposals triggered market volatility in late 2025, disrupting travel plans and denting IT stocks, before partial clarifications offered limited relief. Fresh concerns have since emerged around social media screening and unpredictable processing delays.

Analysts warn that sharply higher visa costs could add hundreds of millions of dollars to expenses for large IT firms, reinforcing the shift toward offshore delivery and non-US hubs. Industry leaders argue that Indian IT companies have already de-risked by boosting local hiring in the US and strengthening India-based delivery.While geopolitical tensions and trade friction cloud the near-term outlook, they are also accelerating multinational interest in expanding GCCs in India to manage regulatory risk and protect margins.

VISA HEAT, GEOPOLITICS SPUR DE-RISKING IN 2025: The USD 100,000 H-1B fee shocker in September sparked widespread panic, disrupted travel plans for many and hammered IT stocks. The ‘new-visas-only’ clarification brought partial relief to the policy cues coming from the US-Indian IT sector's largest export market, though lately, social media screening for H-1B visas, once again, fueled fresh concerns of unpredictable delays.

“A USD 100,000 fee on new H-1B visas could add hundreds of millions in costs for major players, prompting the shift of work offshore and pushing firms to strengthen delivery models in India and non-US hubs,” says Biswajeet Mahapatra, Principal Analyst, Forrester.

Global trade friction and H-1B woes have clouded tech export outlook, though analysts argue that new realities may nudge multinational firms to expand their GCC footprints in India on a more aggressive footing to manage regulatory risk and protect margins.

Sindhu Gangadharan, chairperson of industry association Nasscom and managing director of SAP Labs India, notes the H-1B visa program has, as such, been a temporary measure to bridge US tech skill gaps. Indian IT majors de-risked by cutting H-1B reliance and boosting local hires over the years, she points out.

“We have consistently emphasised that high-skill talent is central to driving innovation, competitiveness, and growth for the US economy. This becomes even more critical at a time when advances in AI and other frontier technologies will shape global competitiveness,” she says.

 

MUTED START TO 2025, THEN AI-SPRINT: Client spends stayed soft in early 2025, as US and European firms tightened discretionary budgets, but the mood lifted through the year as AI programs matured and the mainstay BFSI (banking, financial services, and insurance) vertical began stabilising, globally.

Global giants like Microsoft and Google announced multibillion-dollar commitments to gigawatt-scale data centres and sovereign AI infrastructure in India.

“When digital public infrastructure meets AI, adoption can happen at a population scale - from classrooms to boardrooms and from farms to factories. This belief underpins Microsoft’s commitment to invest USD 17.5 billion in India, to build the cloud and AI infrastructure, skills, and trust needed to turn momentum into long-term impact,” says Puneet Chandok, President, Microsoft India and South Asia.

Globally, AI investment topped USD 200 billion even as circular financing between hyperscalers, startups and chipmakers raised questions of overheating in the market.

Back home, among the top-tier IT pack, Infosys lifted its FY26 revenue guidance to 2-3 per cent (from 1-3 per cent estimated earlier), HCL Technologies raised the lower end of its services revenue outlook to 4-5 per cent (from 3-5 per cent projected in July).

Infosys approved its largest-ever share buyback in September, authorising an INR18,000 crore tender-offer programme priced at INR1,800 a share to return surplus funds to shareholders.

 

STRUCTURAL RESETS, WORKFORCE SHAKEUPS: India’s largest IT services firm TCS disclosed it will lay off about two per cent of its global workforce this year (about 12,200 employees), in a mid-and senior-level shake-up tied to a broader ‘future ready’ organisational transformation aimed at strengthening technology stack, accelerating AI deployments, market expansion, and workforce realignment.

Weeks later, its quarterly headcount dropped by nearly 20,000, a number 66 per cent more than the planned layoffs, triggering strong pushback from IT workers' group NITES.

Across the industry, companies accelerated GenAI training, revamped delivery models around AI agents and workflow automation, and pushed their M&A (merger and acquisition) agenda to fill gaps.

TCS acquired Coastal Cloud for USD 700 million, Wipro completed HARMAN's digital transformation solutions unit for USD 375 million, and Infosys announced it would take a 75 per cent stake in Versent for USD 153 million. Most recently, HCL Technologies announced the purchase of Telco Solutions Business of Hewlett Packard Enterprise for up to USD 160 million.

Companies announced AI platforms, expanded partnerships with hyperscalers, and armed hundreds of thousands of employees with GenAI edge. And yet, full monetisation remained an open question.

Navnit Nakra, Partner and Technology Sector Leader, PwC India says AI is well past the hype phase, but not yet a universal revenue engine.

“The critical shift underway is toward agentic, workflow-driven AI embedded directly into business processes. Revenue impact will follow where AI is tightly integrated into products, customer journeys, and pricing or risk decisions,” Nakra observes.

Indian IT industry, conventionally seen tethered to headcount-driven growth, has begun recasting internal processes with AI workflows to boost productivity and margins.

 

GCCs WIDEN TALENT FUNNEL: India cemented its status as a preferred hub for GCC, with major cities drawing global banks, insurers, tech giants and multinationals. The segment is projected to reach USD 105 billion by 2030, spanning 2.8 million jobs across 2,400 centres.

“We expect GCC growth to be a strong story in 2026, potentially accelerating,” says Siddhartha Tipnis, Partner and Technology Sector Leader, Deloitte India.

Akhilesh Tuteja, Partner and National Leader, Clients and Markets and Technology, Media and Telecommunications (TMT), KPMG in India sees 2026 as year of resilience and optimism, with discretionary spending expected to improve amid stable budgetary outlooks and targeted investments in next-gen technologies.

For an industry that weathered 2025’s wild swings, the survival lessons from past choppy stretches still hold: Adaptability remains its surest bet.

As 2026 beckons, Indian IT’s edge will rest on strengthening AI leadership, building resilient global delivery networks, but, above all, keeping reflexes sharp against macro volatility.