India's top information technology stocks tumbled on Monday after U.S. President Donald Trump imposed a $100,000 fee on new H-1B visa applications, sparking worries of rising costs and slower revenue growth in their biggest market.
The Nifty IT index fell nearly 3 percent, making it the day's worst performer and dragging the benchmark Nifty 50 down 0.2 percent, news report in Reuters.com indicated.
Key IT Stocks Affected
Mphasis: Led the losses with a 4.4 percent decline, reflecting its high exposure to U.S. projects and dependence on skilled Indian professionals.
Tata Consultancy Services (TCS): India's largest IT services firm slid around 3 percent, as investors priced in margin pressure from higher visa costs.
Infosys: Dropped nearly 3 percent, facing similar concerns over on-site U.S. hiring expenses.
Wipro: Fell about 2 percent, with analysts expecting additional costs to trim profits.
Persistent Systems fell about 4-4.5 percent, among the worst hit as investors worried that the new $100,000 H-1B visa fee would hurt its ability to send employees to U.S. clients.
LTIMindtree dropped roughly 4 percent, with analysts noting a similar risk to earnings from higher visa costs.
Tech Mahindra slid about 3.2 percent, reflecting investor concern over the same U.S. visa cost pressures.
HCL Technologies was down around 1.8-2 percent, less severely affected than mid-cap peers.
Sector-Wide Impact
Indian IT industry derives about 57 percent of its revenue from the United States, making it particularly sensitive to U.S. immigration policies. Analysts at ICICI Securities estimate the executive order could shave 1 percentage point off sector profit margins and about 6 percent off earnings if firms maintain their current H-1B hiring practices.
Jefferies described the move as a "$100,000 curveball," but noted that Indian IT companies have four to five years to adjust because the new fee applies only to fresh applications. Many firms are expected to ramp up local hiring in the U.S. and explore near-shore centers in Mexico and Canada to mitigate the impact.
GenAI disruptions that challenge traditional outsourcing models.
Weak U.S. tech spending as clients delay non-essential projects amid inflation and tariff uncertainty.
A proposed 25 percent tax on outsourcing payments that could further squeeze margins.
Industry body Nasscom highlighted that H-1B visas issued to top Indian IT firms have already fallen from nearly 15,000 in 2015 to just over 10,000 in 2024, softening the immediate blow. Still, with Nifty IT down 18 percent year-to-date versus a 7.1 percent gain in the Nifty 50, investors remain cautious.
Outlook
While Indian IT leaders like TCS, Infosys, Wipro, and Mphasis are expected to diversify hiring and expand U.S. local talent pools, the sudden spike in H-1B fees underscores the sector's vulnerability to policy changes in its largest market. Traders and long-term investors will be watching upcoming earnings reports and management commentary for signs of cost-containment strategies and U.S. demand recovery.