H-1B visa fee hike impact on Indian IT stocks today: Indian equity markets opened the week on a cautious note as investors digested the shock announcement from Washington, a steep hike in the cost of H-1B visas. This comes after the Trump administration raised the one-time fee for new H-1B petitions to an unprecedented $100,000 (Rs 88 lakh), a move that has rattled India’s $283 billion IT industry and sent its stocks tumbling on Monday.
IT index trading in red
The immediate market reaction was sharp. The Nifty IT index plunged over 3% in early trade, dragging the benchmark indices lower. The Sensex fell 487 points, or 0.59%, to 82,138.99, while the Nifty 50 slipped 88 points, or 0.35%, to 25,238.10. In sectoral performance, IT bore the brunt of selling pressure, even as autos, FMCG, and media offered marginal support.Among the biggest casualties was Tech Mahindra, which lost nearly 6% in early trading. Mid-tier firms such as Persistent Systems, LTIMindtree, and Mphasis also fell over 5% each, underscoring the vulnerability of companies with greater reliance on fresh H-1B approvals. Large-cap heavyweights were not spared either: TCS dropped over 2%, Infosys slipped 2% to Rs 1,510.20, Wipro shed nearly 3%, and HCLTech fell close to 2%. By mid-morning, all constituents of the Nifty IT index were trading in the red.The timing of the visa announcement has particularly unsettled investors. Indian IT stocks had staged a fragile recovery in recent weeks after Trump’s conciliatory tone on tariffs lifted hopes that the worst of the trade tensions was over.But Friday’s visa policy reversal rekindled concerns about rising costs and squeezed margins for a sector already battling global demand slowdown and weak earnings.
What the new visa rule means
The $100,000 levy will be imposed on new H-1B petitions filed by companies seeking to deploy skilled foreign workers, many of them Indian tech professionals. Importantly, the fee is not an annual charge, and existing H-1B holders will not face additional costs for renewals or re-entry. That nuance, analysts say, limits the immediate financial hit but does not eliminate the longer-term threat.
Impact on India’s IT services firms
For India’s IT services firms, the rule alters the economics of placing talent in the US, their biggest market. The cost advantage of sending Indian employees overseas compared to hiring locally will narrow considerably. “Cost arbitrage between sending an Indian employee vis-à-vis hiring locally will reduce substantially,” Siddarth Bhamre, head of institutional research at Asit C. Mehta had earlier told ET, adding that companies will need to rethink pricing and hiring strategies.While large players like TCS, Infosys, and Wipro may absorb the higher costs due to scale and diversified client bases, analysts warn that mid-tier firms—which depend more heavily on fresh H-1B approvals—will face stiffer challenges.Beyond the immediate sell-off, the visa fee hike highlights deeper structural challenges for Indian IT. Companies may accelerate offshoring to India or increase local hiring in the US, but both strategies could weigh on profitability.
Year-to-date, IT stocks have endured a rough ride
According to ET, TCS has declined 23%, Infosys has slipped 18%, and Wipro has lost nearly 15%, reflecting investor unease over slowing global tech demand and inconsistent earnings commentary. The latest US policy shift now threatens to derail any nascent recovery.For now, the consensus among experts is mixed: stay nimble, avoid panic, and reassess exposure to a sector facing renewed headwinds. But one thing is clear—the Trump administration’s visa bombshell has once again put India’s IT giants on the defensive.
