Clarity on H-1B visa rules to ease pressure on IT stocks: Analysts
Indian IT companies got a big break on Sunday after the US government clarified that returning visa holders won’t face the new $100,000 H-1B visa fee. This news should ease worries as markets kick off tomorrow, experts say.
The update also means H-1B petitions filed before today’s deadline dodge the hefty charge altogether. For Indian tech giants like Infosys, TCS, and Wipro, this comes just in time amid fears over the Trump administration’s tough new visa rules.
Analysts predict a short-term dip of 3 to 5 percent in Indian IT stocks, but they call it no big deal. Companies can pivot by moving workers to places like Canada or Mexico to keep projects humming. Looking ahead, if stocks tumble 15 to 25 percent in the next few weeks, that could spell a smart buying chance for long-term investors. A small 3-5 percent drop? Just shrug it off, they advise. Overall, IT shares might lag a bit until trade talks deliver real fixes.
Indian firms are already cutting back on H-1B reliance, according to industry data. Only about 20 percent of their workforce heads to US client sites, and most of those are local hires. Just 20-30 percent actually use H-1B visas. Plus, applications from these companies have plunged—from 42,671 in 2017 to 20,870 in 2024—showing a shift toward other strategies.
The pressure shows in the numbers: The Nifty IT index has fallen 16 percent so far this year, while the broader Nifty 50 climbed 7.1 percent. Heavy hitters like HCL Technologies, TCS, and Infosys have shed more than 28 percent each.
US Commerce Secretary Howard Lutnick backs the changes, saying they fix a system that let underpaid workers—often needing government aid—snag jobs from American grads. President Trump aims for these fees to rake in over $100 billion for the US Treasury, earmarked to tackle national debt and fund tax cuts.
But not everyone’s on board. Critics warn the $100,000 H-1B visa fee will crimp talent flow and slow down innovation in tech. After all, Indians make up 71 percent of H-1B holders, fueling firms like Infosys, Wipro, Cognizant, and Tata Consultancy Services with skilled pros for US projects.
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