IT stocks came under heavy selling pressure and fell by 2-5 per cent on Monday after US President Donald Trump stunned the technology sector by announcing a steep hike in the H-1B visa fee. The new order mandates a $100,000 one-time fee for fresh applicants, a sharp increase from the earlier range of $1,710 to $6,460.
This unexpected move wiped out nearly Rs 83,000 crore in market capitalization from the Nifty IT index, which fell around 3 per cent for the day. Shares of Mphasis, LTIMindtree, Coforge, and Persistent Systems tumbled 4-5 per cent each, while heavyweights such as TCS, Infosys, Wipro and HCL Tech ended lower by 2-3 per cent. The index has already been under pressure for months, with most IT majors trading 20-30 per cent below their 52-week highs.
The broader market was also weak, though losses were less severe compared to the technology pack. The Sensex slipped 466 points, or 0.56 per cent, to close at 82,159.97, while the Nifty shed 0.49 per cent to end at 25,202.35. However, it was the IT sector that bore the brunt of investor panic as analysts weighed the implications of Trump’s move on India’s $283 billion outsourcing industry.
Industry experts said the steep increase in visa costs would disrupt the long-standing offshoring model that Indian firms depend on. With on-site deployment becoming significantly more expensive, companies may be forced to accelerate their pivot toward domestic delivery centres or rely on nearshore hubs in markets such as Mexico, Canada, and Eastern Europe.
Ponmudi R, CEO of Enrich Money, described the hike as a near-term negative that would put pressure on margins and business models.
Sumit Pokharna, VP of Fundamental Research, Kotak Securities, said the full financial impact would likely be felt only from FY28, though strains may begin showing in the next H-1B lottery cycle starting the second half of FY27. He added that if companies are unable to alter their sourcing patterns, competition for on-site talent could intensify, driving wage inflation of about 10 per cent and cutting profit margins by 100-200 basis points. In such a scenario, earnings per share estimates for FY27 could see a 7-14 per cent hit.
In the near term, firms are expected to lean more on subcontractors to replace expiring H-1Bs, though this too will increase costs by 20-25 per cent on average. With the sector already in a bear phase, the sudden policy shift from Washington has deepened concerns over growth visibility and profitability for India’s IT bellwethers.
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