Indian IT stocks plunged sharply on Monday after President Trump’s massive H-1B visa fee hike rattled investor confidence and raised concerns over rising on-site costs.
Mumbai
Indian IT shares tumbled on Monday after US President Donald Trump announced a dramatic increase in H-1B visa fees, sending shockwaves through the sector. The fee for each visa application has risen from $1,000 to $100,000, marking a hundredfold jump. Nifty IT dropped more than 3.5% in intraday trade versus a modest 0.5% fall in the benchmark Nifty.
Tech Mahindra led the losses with a 5.8% drop, followed by Mphasis and Persistent Systems, each down over 5%. TCS, Wipro, HCL Tech, Infosys, LTIMindtree and Coforge also fell between 3–5%, while Oracle Financial Services shed 1.4%. Analysts expect the move to push Indian firms toward more offshore delivery and local hiring to offset costs.
According to Motilal Oswal (MOSL), Indian vendors now keep only about 20% of employees on-site, and of these, roughly a quarter use H-1B visas. This limited exposure offers some protection, but firms will likely cut back on new filings and expand remote work. MOSL said offshore delivery can be more profitable, potentially cushioning margins even as top-line growth slows.
Brokerage JM Financial estimated a margin hit of 15–50 basis points under an aggressive local hiring scenario but sees minimal impact under increased offshoring. While legal challenges may delay implementation, the fee hike signals a tougher US immigration stance. MOSL maintains a preference for HCL Tech and Tech Mahindra among large caps, and Coforge and Hexaware in mid-caps, citing their resilient business models in cost-conscious markets.
