H-1B fee hike: IT firms to rethink labour strategy
Rudra said that the steep rise in H-1B costs makes the visa route “uneconomical,” given that the fees are now comparable to average US wages. “If this goes through, IT companies will have to rethink their supply chain. We expect more offshoring to India, higher local hiring in the US, and increased use of nearshore hubs like Canada and Mexico,” he said.
Currently, 20–50% of US on-site staff across top IT firms are H-1B dependent. Rudra estimates that if companies continue relying heavily on new visas, they could face a 2–6% annual earnings hit. However, he believes firms are more likely to shift models rather than absorb such costs.
GCC expansion: A silver lining for India
With the US talent supply tight, Rudra expects multinational corporations to double down on GCCs in India. “Captive centres have been growing steadily for a decade, and this could accelerate further. Big tech firms and global banks already use India as a talent hub. Now, more clients may expand capability centres here instead of depending on expensive H-1B talent,” he noted.
For Indian IT companies, GCCs also represent new opportunities. Many firms have already launched special GCC-focused service initiatives, enabling them to partner in building and scaling these centres while staying connected to innovation in areas such as AI, cloud, and digital services.
IT earnings outlook: Another weak year ahead
Despite the structural opportunity, Rudra cautioned that FY26 will likely be another weak year for IT earnings. The sector has already underperformed, with Nifty IT down around 20% this year. “Macro uncertainty, trade risks, and AI deflation are weighing on growth. We expect flat to slightly soft revenue this year, with recovery only possible from FY27 if global headwinds ease,” he said.
Rate cuts by the US Fed could revive discretionary spending in financial services and cyclical industries like industrials and retail, but Rudra stressed that macro and trade stability will be equally critical.
Quick commerce: Triple-digit growth momentum
Shifting focus to India’s consumption story, Rudra said quick commerce is witnessing a channel shift at breakneck speed. Players like Blinkit, Zepto, and Instamart are rapidly gaining share from traditional retail, modern trade, and even e-commerce. “We’ve seen triple-digit growth for over a year, and that pace is likely to continue as more categories are added and adoption widens,” he said.
The competitive landscape has intensified, with the number of dark stores rising from 1,800 last year to nearly 5,000 now across players. While pure plays are driving growth, e-commerce giants and modern trade retailers are also launching their own quick commerce arms.
Profitability still a challenge
Despite rapid adoption, profitability remains elusive. Heavy spending on dark store additions, performance marketing, and discounts continues to weigh on margins. However, Rudra highlighted improving store utilisation and more disciplined customer targeting as positive signs.
“The market is splitting into convenience-seeking consumers who value reliability and discount-seeking consumers who churn frequently. Companies that can retain high-quality customers are closer to breaking even,” he said. While some firms may turn profitable this year, others will likely take longer.
Outlook: Transformation in IT, disruption in retail
Summing up, Rudra said the H-1B fee hike could reshape the IT sector’s labour model by pushing more work offshore and into GCCs, while quick commerce is set to remain the fastest-growing retail channel in India. “The IT sector faces near-term earnings pressure, but structurally, India will benefit as a global talent hub. On the consumer side, quick commerce is no longer an experiment—it’s becoming a mainstream retail format,” he concluded.
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