Indian IT bellwethers faced a brutal market thrashing on Monday as U.S. President Donald Trump's shock executive order slapped a staggering $100,000 annual fee on H-1B visa applications, igniting fears over ballooning costs and talent shortages. Shares of Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Oracle Financial Services Software plunged at the opening bell, with TCS dropping over 4% and Infosys shedding nearly 3.5% in early trading. The knee-jerk reaction wiped out billions in market value, underscoring the sector's heavy reliance on the H-1B program to fuel its U.S.-centric growth engine.
The proclamation, signed late Friday and effective from Sunday at 12:01 a.m. ET, targets new H-1B applicants outside the U.S., requiring employers to fork over $100,000 per year per visa—potentially totaling $300,000 over the standard three-year validity period, extendable to six years. While White House officials scrambled to clarify that existing visa holders and renewals are exempt, the initial ambiguity triggered chaos: tech giants like Amazon, Microsoft, and Meta urgently messaged employees abroad to rush back before the deadline, fearing re-entry snags. Immigration lawyers warned of "immediate peril" for travelers, amplifying the weekend frenzy and spilling over into Monday's bloodbath on Dalal Street.
For India's IT export powerhouses, the blow lands at a precarious moment. The sector, which derives over 60% of its revenues from North America, snapped up more than 20,000 H-1B visas in fiscal 2025 alone, per U.S. Citizenship and Immigration Services data. Analysts at Morgan Stanley estimate the fee could add up to $2-3 billion in annual compliance costs for top firms if hiring patterns hold, squeezing already razor-thin margins amid slowing U.S. client spending. "This isn't just a fee; it's a talent tax that could force a rethink on offshoring strategies," quipped a Mumbai-based fund manager, as peers like Wipro and Tech Mahindra joined the rout, down 2-3% apiece. The Nifty IT index cratered 3.2% by noon, dragging the benchmark Sensex lower by 1.5%.
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Trump's move, framed as a "commonsense" shield for American workers against wage suppression, reignites a long-simmering debate that's pitted Silicon Valley donors against MAGA hardliners. Proponents hail it as a curb on "visa spam" by outsourcing firms, while critics decry it as a self-inflicted wound to U.S. innovation—after all, over 730,000 skilled immigrants currently bolster the economy via H-1B. In India, industry body NASSCOM has fired off a letter to U.S. Trade Representative Katherine Tai, urging a reversal and highlighting how the policy could exacerbate global talent wars. With the February 2026 H-1B lottery looming, executives are already brainstorming workarounds: ramping up local U.S. hiring, pivoting to nearshore alternatives in Canada or Mexico, or doubling down on automation to wean off foreign labor.
As the dust settles, the fee's full ripple effects remain murky—will it deter Indian IT's aggressive U.S. expansion, or spark a wave of domestic upskilling? One thing's clear: in an era of escalating trade frictions, Trump's orbital strike on H-1B has turned a routine visa into a high-stakes geopolitical flashpoint, leaving Indian tech titans scrambling for cover. Investors, brace for volatility; this saga's far from over.
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