H-1B Visa Fee Hits Indian IT Stocks Hard
Indian IT stocks experienced a significant fall on Wall Street following U.S. President Donald Trump's imposition of a hefty $100,000 fee on H-1B visas. This decision poses a serious threat to the influx of skilled Indian engineers into the United States, which is crucial for many Indian IT firms. On Friday, Infosys' American Depository Receipts (ADRs) plummeted by 3.41 percent to $16.97, while Wipro’s ADRs dipped by 2.10 percent to $2.80. Cognizant, which has extensive operations in India, also saw its shares drop by 4.75 percent to close at $66.94.
The new visa regulations directly impact outsourcing and on-site deployment models that have been the foundation for Indian software exporters for decades. As companies like Infosys and Wipro rely heavily on sending thousands of engineers to U.S. client locations, they are among the hardest hit by this new order. Tata Consultancy Services (TCS), India's largest IT firm, was somewhat shielded from immediate market reactions as it does not have an ADR listing in the U.S.
Market analysts predict that the repercussions of this visa fee will extend beyond New York, significantly affecting Indian markets, especially IT stocks, when trading resumes. Ajit Mishra from Religare Broking noted that the markets would react swiftly to Trump's executive order. Export-driven sectors already grappling with tariff pressures could face further challenges, particularly at a time when trade negotiations are ongoing.
Investor sentiment around IT stocks has already been fragile, and many expect tech shares to continue trading lower. Infosys has fallen by 23 percent from its 52-week high, and TCS has dropped over 29 percent. Other IT firms such as Tech Mahindra and HCL Technologies are also navigating uncertainties due to their substantial presence in the U.S.
Furthermore, the new visa rules not only threaten the business models of these firms but also jeopardize the livelihoods of Indian engineers working in the U.S. As of March 31, 2025, Infosys employed a significant number of engineers in the U.S., crucial for maintaining client relationships. TCS, too, has a strong workforce in North America, with over 46,000 associates in various U.S. locations.
Beyond corporate profits, if these visa regulations force many Indian engineers to return home, the impact on remittances could be dire. India is the world’s largest recipient of remittances, receiving $129 billion in 2024, with nearly 28 percent from the U.S. This decline could strain families in states like Kerala, Uttar Pradesh, and Bihar, making it difficult for them to meet basic needs.
The pressing question remains: will the new visa regime derail the growth engine of India’s most globalized IT industry?
