By Swetha Anil Kumar
After US President Donald Trump on Friday sharply raised the application fee for H-1B visas, shares in Indian IT services companies fell on Monday, threatening disruption for a sector that has been one of the country’s major business successes.
The one-time cost of H-1B visas has been raised to $100,000 (Rs 88 lakh) and IT giants such as Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, Tech Mahindra, and Coforge slipped up to 6% in morning deals on Monday, September 22, rattling sentiment in a sector that had only recently shown signs of a rebound.
The Nifty IT index and TCS closed down 3 percent in Mumbai. Infosys, Wipro and HCLTech closed 2.6, 2.2, and 1.9 percent lower, respectively.
The IT sector earns about 57% of its revenue from the U.S. It is a contentious issue for American job seekers competing with cheaper Indian labor and has long gained from U.S. work visa programs and the outsourcing of software and business services.
India accounted for 71% of approved beneficiaries and was by far the largest beneficiary of H-1B visas in the year 2024.
Trump’s order could knock about 1 percentage point off profit margins and about 6% off earnings for IT firms if they continue to hire Indians under the program, ICICI Securities estimated.
After Trump’s announcement on Friday, some businesses in Silicon Valley urged staff not to travel outside the country, and it also triggered chaos in the tech industry. But the new higher fee applied only to fresh applications from the next visa lottery in February, not to existing H-1B holders, and would be a one-off payment, the White House clarified on Saturday.
The decision would disrupt business continuity for onshore projects, which may require adjustments, Nasscom, the Indian IT and tech industry trade body, said. They also noted that by increasing local hiring in recent years, Indian groups had been reducing their reliance on visas and said that high-skill talent is vital to driving innovation, competitiveness, and growth for America’s economy.