Trump’s H-1B Changes Raise Scrutiny Into TCS, Other Indian Tech Firms

Tata Consultancy Services Ltd. (TCS), India's largest IT services exporter, is set to confront investor concerns over the potential fallout from U.S. President Donald Trump's recent proposal to sharply increase H-1B visa fees, a move that could squeeze profits and exacerbate talent challenges in the sector. As the second-largest user of the visa programme—deploying thousands of engineers to client sites across America—TCS shares have already dipped, reflecting broader market jitters. The announcement, made on September 19, has ignited debates on immigration policy's role in global tech labour dynamics, with Indian firms historically reliant on the programme to staff U.S. operations.

The proposed fee hike to $100,000 per visa application marks a significant escalation from current levels, aimed at curbing what Trump describes as the exploitation of foreign workers at the expense of American jobs. H-1B visas, capped annually at 85,000, allow U.S. companies to hire skilled foreign professionals in speciality occupations, predominantly in tech.

Indian firms like TCS, Infosys, and Wipro have long dominated approvals, accounting for over 70% of visas in recent years, according to U.S. Citizenship and Immigration Services data. While these companies have gradually reduced H-1B dependency—shifting toward local hiring and global capability centres—the abrupt cost surge threatens to offset per-employee operating profits entirely, analysts warn.

Jefferies India estimates the policy could erode sector earnings by 4% to 13%, factoring in higher wages from a potential talent crunch as firms pivot away from visa-dependent models. Conversely, Crisil Intelligence suggests a milder margin hit of 10-20 basis points, assuming costs are passed onto clients through contract renegotiations.

TCS, reporting quarterly results this week, may face pointed questions on mitigation strategies, including accelerated U.S. hiring and AI-driven efficiency gains. Peers in the $250 billion Indian IT industry, already navigating subdued U.S. corporate spending, could see similar pressures, with the NSE Nifty IT index plunging 7.2% since the proposal.

Also Read: US Permits South Korean Workers on Short-Term Visas at Industrial Sites

The visa controversy revives longstanding U.S. political tensions, echoing 2016-2020 reforms under Trump's first term that tightened scrutiny on outsourcing giants. Critics, including U.S. senators, have accused firms like TCS of prioritising H-1B hires over American workers amid layoffs, prompting calls for stricter wage floors and audits.

For Indian tech leaders, the shift underscores a need for diversification—bolstering domestic innovation hubs and upskilling programmes to lessen U.S. exposure. As global trade frictions mount, the industry's resilience will hinge on agile adaptation to these evolving geopolitical realities.

Also Read: Organisation Slams Trump’s $100,000 H1B Fee as Reckless, Xenophobic Move