Trump's $100K H-1B Fee Shakes Indian IT Giants’ Fortunes

Indian technology stocks faced a sharp decline on Monday after US President Donald Trump announced a sweeping revamp of the H-1B visa program, introducing a $100,000 fee on new applications. The move has rattled outsourcing giants that rely heavily on the US market, including Tata Consultancy Services, Infosys, and Tech Mahindra.

Shares of TCS dropped 3.4%, Infosys fell 3.9%, and Tech Mahindra plummeted 6.5%, marking one of the steepest selloffs in recent months. Investors are concerned that the new visa fee could significantly squeeze profit margins, particularly for companies with large US-based operations dependent on H-1B workers.

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The proposed fee is expected to disrupt the traditional business model of Indian IT firms. Analysts warn that higher costs per H-1B employee could push companies to hire more locally in the US, increase subcontracting, or accelerate offshoring. Such changes may erode the cost advantages that have long been central to India’s IT dominance.

Profit margins are projected to face pressure, with estimates suggesting a potential decline of up to 13%. The shift comes at a challenging time for the sector, already grappling with weak quarterly earnings, client cost-cutting, and workforce reductions. The broader IT index has dropped over 15% this year, while the benchmark NSE Nifty 50 gained 7%.

Some firms, like HCL Technologies, which rely less on visa-dependent staff, may manage the disruption better. However, for companies still closely tied to the H-1B model, the changes are expected to take a visible toll from fiscal 2027 onwards.

The new US policy has left investors bracing for a period of strategic adjustment, as Indian IT companies face the challenge of balancing rising costs with maintaining their competitive edge in global outsourcing.