Five of India's largest IT companies have reported a substantial financial impact from new labour code implementation, with combined additional expenses reaching nearly ₹5,000 crore in the three months ended December 2025. The significant cost increase stems from mandatory revisions to wage definitions required under the new regulatory framework.

Financial Impact Overview

The implementation of new labour codes has created a substantial one-time financial burden for the IT sector. The following table illustrates the scale of impact:

Regulatory Changes and Compliance

The new labour codes have introduced revised wage definitions that require companies to restructure their compensation frameworks. These regulatory changes have necessitated comprehensive adjustments across the IT sector, particularly affecting companies with substantial workforce numbers.

The implementation has been particularly challenging for IT companies due to their large employee base, which amplifies the financial impact of any wage-related regulatory modifications. The sector's significant workforce numbers have made the compliance costs more pronounced compared to industries with smaller employee counts.

Sector-Wide Implications

The ₹5,000 crore additional expense represents a considerable financial adjustment for the affected companies during the reporting period. This one-time hit reflects the comprehensive nature of the wage definition revisions required under the new labour codes.

The impact demonstrates the substantial compliance costs associated with major regulatory changes in the IT sector, where large employee bases translate to significant financial implications when wage structures require modification.

The Ministry of External Affairs has formally raised concerns with the United States regarding significant delays in H-1B visa processing affecting thousands of Indian nationals. On December 26, MEA spokesperson confirmed that India expects these concerns to be addressed by US authorities as widespread interview cancellations and enhanced vetting measures create major disruptions for Indian professionals.

Government Response and Diplomatic Engagement

MEA spokesperson Randhir Jaiswal confirmed that the government has received numerous representations from Indian nationals facing problems with rescheduled visa appointments. "We have flagged these issues and our concerns to the US side, both here in New Delhi and in Washington, DC," Jaiswal told reporters.

While acknowledging that visa-related matters fall under the sovereign authority of individual countries, India expects the US to address the delays and disruptions affecting H-1B and H-4 visa applicants. The government remains actively engaged with US authorities to minimize disruptions caused to Indian nationals.

Enhanced Vetting Measures and Processing Delays

Starting December 15, the US Department of State expanded online presence reviews to all H-1B and H-4 applicants globally as part of standard visa screening. This social media vetting process covers applicants of all nationalities for both new applications and renewals.

Consular officers now review applicants' social media activity across multiple platforms, with the US Embassy advising applicants to keep their profiles public to facilitate screening.

Mass Interview Cancellations and Impact

Thousands of H-1B visa applicants have experienced abrupt postponements of their pre-scheduled interviews, creating significant challenges for Indian workers:

US Embassy Warning Against Visa Scams

Amid processing delays, the US Embassy in India issued an advisory on December 26 warning applicants against fraudulent messages and agents offering guaranteed visas or faster approvals in exchange for money. "Visa scams and fraud are more common than you think, and they can cost you time, money, and your travel plans," the embassy stated.

The embassy emphasized that the only way to obtain a US visa is through official channels, with appointments bookable exclusively through www.ustraveldocs.com . Officials urged applicants to remain vigilant and rely only on credible sources to avoid falling victim to fraud.

Broader H-1B Program Changes

The developments occur as the US undertakes broader changes to its H-1B program. The Department of Homeland Security has announced plans to replace the lottery-based H-1B selection system with a weighted model prioritizing higher-paid and higher-skilled workers from the FY2027 cap registration season, while retaining the existing annual visa cap.

The H-1B visa program remains crucial for US technology companies to employ foreign workers, with Indians forming the largest group of H-1B visa holders. The diplomatic engagement between India and the US highlights the significant impact of visa processing delays on the large Indian professional community working in American technology sectors.