Indian IT stocks slide on US visa crackdown
Indian information technology stocks fell on Monday after U.S. President Donald Trump imposed a $100,000 fee on new H-1B visa applications, threatening the sector's long-standing model of rotating skilled workers through the U.S.
On Friday, Trump said companies would have to pay higher fees for H-1B worker visas. Last year, 71 per cent of approved H-1B beneficiaries were Indians.
The tech sub-index was down 2.6 per cent, pulling back from an initial drop of nearly 4 per cent after Indian IT industry body Nasscom said the U.S. had clarified that the higher fees will only apply to new H-1B applications.
Initial confusion resulted in H-1B visa holders rushing back to the U.S. fearing they would be barred from re-entry once the new rule took effect, tech workers told Reuters.
The U.S.-listed shares of Infosys and Wipro fell 3.4 per cent and 2.1 per cent, respectively, on Friday.
All 10 stocks on the tech sub-index declined on Monday, led by Persistent Systems at 4 per cent. IT majors TCS, Wipro and Infosys were down about 2 per cent each.
India's $283 billion IT sector, which generates about 57 per cent of revenue from the U.S., has long benefited from U.S. work visa programmes and the outsourcing of software and business services.
Trump's order "is among the last things that the sector sentiment needed, amid persistent pressure weighing on growth from geopolitical and macro uncertainties and structural concerns caused by GenAI," said analysts at TD Cowen.
IT stocks are the worst performers so far this year, falling 15.6 per cent versus a 7.1 per cent gain in the benchmark Nifty 50 index.
