IT stocks tumble as Trump slaps $100,000 fee on new H-1B visas
Tech Mahindra (down 4.04%), Persistent Systems (down 3.68%), LTIMindtree (down 3.68%), Mphasis (down 3.36%), Coforge (down 3.33%), Infosys (down 2.48%), HCL Technologies (down 2.41%), Wipro (down 2.24%), Tata Consultancy Services (down 2.18%) and Oracle Financial Services Software (down 0.39%) slumped.
The H-1B program's annual quota of 85,000 visas, including 65,000 under the regular pool and 20,000 for U.S. master?s degree holders, remains unchanged. The new fee will apply only to fresh applicants and will not affect existing visa holders or renewals.
Analysts said the immediate cost implications for Indian IT firms are limited as only 1-3% of their global workforce is on H-1B visas and less than a third of these are new applicants. Within the U.S., about 65-70% of IT employees are locals while 30-35% work on visas.
Since the FY26 visa lottery is already complete, the new fee will take effect only from FY27. Companies face two possible strategies. Absorbing the $100,000 charge would mean an additional $16,600-33,000 in annual costs per employee over a typical 3-6 year tenure, with some of this burden likely passed on to clients. Alternatively, replacing visa hires with local employees could raise costs by around 25-30%, translating into an extra $25,000 per worker and a 2-4% hit to earnings per share.
In the short term, analysts expect no material hit to margins, though ongoing client negotiations could delay contract closures. Over the medium term, the industry may see only a modest earnings drag from FY27. If local hiring proves difficult, offshoring could increase, which may even support profitability.
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