H-1B visa hike: IT firms suffer on stock market; IT index down 2.8%
The reaction on Dalal Street was as expected, as the visa fee hike has led to uncertainty for the technology sector, given that the US accounts for around 60% of the sector's revenues.
The IT index on the National Stock Exchange (NSE-IT) was down 2.83% on Monday, underscoring the hammer blow impact on Indian technology companies after the US President Donald Trump's administration hiked the H-1B visa fees to $100,000 last week.
The reaction on Dalal Street was as expected, as the visa fee hike has led to uncertainty for the technology sector, given that the United States accounts for around 60% of the sector's revenues.
Share price of Tata Consultancy Services, India’s largest technology services company, was down 2.7% trading at Rs 3,083 apiece. Infosys saw a 2.58% decline at Rs 1,500.40. Wipro and HCLTech also saw similar trends.
However, IT companies—with much less revenue and ability to absorb the shock of the visa fees hike, unlike their larger peers—saw a sharper dip. Share price of LTIMindtree was down 4.26% at Rs 5,275.50; Persistent Systems was trading 4.76% down at Rs 5,244 apiece.
Tech Mahindra, Coforge, and Mphasis also saw their stocks decline 3.57%, 3.92%, and 4.42%, respectively.
“There will be a certain short-term impact due to the hike in visa, but this is manageable,” said V Balakrishnan, former board member and CFO of Infosys.
The biggest misconception around H-1B visas is that Indian technology companies bring in employees to the US at lower wages. However, the Indian IT industry’s trade body Nasscom clarified, saying, “Salaries are at par with local hires. Moreover, H-1B workers are a mere decimal point of the overall US workforce.”
Over the years, Nasscom said, Indian and India-centric companies operating in the US have significantly reduced their dependencies on H-1B visas and steadily increased their local hiring.
According to available data, H-1B visas issued to leading Indian and India-centric companies have decreased from 14,792 in 2015 to 10,162 in 2024. H-1B workers for the top 10 Indian and India-centric companies are less than 1% of their entire employee base. “Given this trajectory, we anticipate only a marginal impact for the sector,” it noted.
The uncertainty is likely to persist for some more time before the Indian IT companies can recalibrate their strategies to this new reality.
The Nifty50 was down 0.20% trading at 25,275.55, while BSE Sensex slid 0.31% to 82,369.60, as of 2 PM on Monday.
Edited by Suman Singh