Athira Sethu
Kochi, 22 Sep 2025
Stocks of India’s leading IT firms fell dramatically on Monday after the US government declared a dramatic overhaul of the H-1B visa system, decoupled from the lottery system, subjecting new applicants to a steep $100,000 fee. The move came as a direct blow to Indian IT companies that depend heavily on these visas for sending engineers to the United States to work on client projects. Consequently, most Indian technology stocks lost money, and the technology space experienced one of its worst days in recent history.
The worst hit was Tech Mahindra, which dipped by nearly 5%. Other IT giants like Infosys, Tata Consultancy Services (TCS), HCLTech, and Wipro also lost more than 2.5% in their shares. The Nifty IT index, which monitors the performance of IT stocks, declined close to 3%.
This quick market reaction is due to the fact that Indian IT firms rely a lot on H-1B visas. Indian workers, primarily engineers deployed by firms such as Infosys, TCS, and HCLTech, receive approximately 60-70% of these visas. Employing engineers at a physical location in the US has been the key to their business model for years. Most of their clients would like to have engineers work onsite in the country, and they pay very high on-site charges for such contracts. With the introduction of the visa fee increase, sending people to the US will become more expensive, which can dent profits, particularly in segments such as software development and consulting.
Experts feel Indian IT companies can be forced to alter the way they operate. They may begin sending fewer employees to the US and do more work from India. They could also get more local employees in the US, but this would be at a premium wage. Another possibility is that they accelerate automation, but all of these shifts will involve costs, which is why investors are worried. Although some of these additional expenses could be redistributed to customers, the effect on profit in the short term appears unavoidable.
Ponmudi R, the CEO of Enrich Money, said that the market was reflecting “mild negativity” due to the H-1B visa reports. He pointed out that the hike in visa charges would increase the cost for Indian IT firms to send employees to the US and could compel them to change business models.
On the positive side, India was given a welcome boost when Japan’s R&I upgraded the credit rating of India from BBB to BBB+ with a stable outlook. It is likely to bring additional investment into India and enhance confidence in India’s economy.
In India, too, the rollout of “GST 2.0,” an upgraded version of the Goods and Services Tax, is also anticipated to give the economy a big push. It is hoped that with a simplified tax system and lowering of rates for consumable goods, consumer expenditure will rise, particularly during the festive season.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated that the market can have a combination of responses. IT stocks are facing challenges with the global issues, such as the increase in visa fees, but domestic stocks can gain due to the boost in consumption on the back of tax relief.
