Shares of major Indian information technology companies came under pressure on Wednesday, December 24, after the Trump administration announced sweeping changes to the H-1B visa selection process, raising fresh concerns over hiring costs, workforce availability, and margins for IT exporters.
Stocks such as Infosys, Tata Consultancy Services, Tech Mahindra, Wipro, HCLTech, Persistent Systems, and Coforge slipped up to 1% in early trade, with Coforge emerging as the top loser on the Nifty IT index, down around 1.1%.
What triggered the fall in IT stocks?
The decline follows a policy overhaul by the US Department of Homeland Security (DHS), which has replaced the long-standing random lottery system for H-1B visas with a weighted, wage-based selection process.
Under the new framework, higher-paid and highly skilled workers will receive preference, while entry-level and lower-wage applicants will see sharply reduced chances of securing visas. The policy is aimed at curbing alleged misuse of the H-1B programme for lower-wage hiring and strengthening protections for American workers.
When will the new H-1B rules apply?
The revised selection mechanism will take effect from February 27, 2026, and will be implemented starting with the FY2027 H-1B cap registration season. This gives companies limited time to adjust their global hiring and deployment strategies.
Why is this a concern for Indian IT companies?
Indian IT firms are among the largest users of H-1B visas, particularly for Wage Level I and II employees, who together account for nearly 70% of all H-1B petitions. In contrast, highly paid Wage Level III and IV workers make up only about 30% of the current visa mix.
With the new weighted system:
- Wage Level IV applicants will receive the highest number of entries in the selection pool, significantly improving approval odds.
- Wage Level I applicants will receive no additional weightage, reducing their chances substantially.
This shift could force Indian IT companies to raise wages, change staffing models, or hire more locally in the US, all of which may pressure margins.
Impact of the proposed $1,00,000 H-1B visa fee
Adding to investor worries, a US federal judge has allowed the Trump administration to proceed with a proposed $1,00,000 fee per H-1B visa, a sharp increase from current costs.
Earlier, Sowilo Investment Managers fund manager Sandip Agarwal had estimated that such a fee could result in a 6%–7% margin impact across top Indian IT firms.
He had explained that with roughly 10,000 visas annually and $80 billion in combined revenue for the top five Indian IT companies, the additional cost could translate into a $1 billion hit, which is significant against industry operating margins.
Stock reaction on Dalal Street
Following the announcement:
- Coforge fell about 1.1%
- Infosys, Tech Mahindra, HCLTech, Wipro, and Persistent Systems declined 0.5% to 1%
The broader IT index remained under pressure as investors assessed the long-term implications of tighter visa norms, rising compliance costs, and uncertainty around US policy direction.
Bottom line
Indian IT stocks are reacting to structural risks rather than short-term earnings concerns. The combination of wage-weighted H-1B selection, a potentially steep visa fee, and continued scrutiny of offshore hiring has revived fears over cost inflation and margin compression, keeping IT shares under pressure in today’s session.
