Topline
Shares of major Indian tech services firms plunged sharply on Monday in response to President Donald Trump’s move to impose a new $100,000 fee on H-1B visa applications, which is expected to create operational and cost challenges for the outsourcing companies, which rely on the temporary skilled worker visa to deploy Indian workers to clients in the U.S.
Shares of major Indian IT services firms like Infosys slumped sharply on Monday.
AFP via Getty Images
Key Facts
Shares of Tata Consultancy Services, India’s largest IT services firm by market cap, was down than 3.1% to $34.85 (Rs 3,073.50) during afternoon trading in Mumbai.
Infosys’ stock dropped 3.19% to $16.91 (Rs 1,491), HCLTech shares were down 1.92%, while shares of Tech Mahindra and Wipro were down 3.55% and 2.30% respectively.
The Bombay Stock Exchange’s benchmark SENSEX index also declined on Monday by 0.26% to 82,347 points, while the Nifty IT index, which tracks the country’s IT sector, fell more than 3%.
Shares of U.S. tech giants Google, Meta and Microsoft, which are among the biggest sponsors of H-1B visas for foreign workers, were down 0.61%, 0.37% and 0.55% respectively in premarket trading.
Over the weekend, following Trump’s announcement, Indian government officials warned there would be an “immediate fallout” for Indian IT firms and professionals, adding: “We have to see how companies adapt to it.”
What Has India Said About The Visa Fee Hike?
In a statement issued over the weekend, India’s foreign ministry said: “This measure is likely to have humanitarian consequences by way of the disruption caused for families. Government hopes that these disruptions can be addressed suitably by the US authorities.” The statement added: “Skilled talent mobility and exchanges have contributed enormously to technology development, innovation, economic growth, competitiveness and wealth creation in the United States and India.”
How Many H-1b Recipients Are From India?
Around 73% of all H-1B workers whose applications were approved in the fiscal year 2023 were Indian born, the Pew Research Center reported, citing USCIS data. China ranked a distant second with 12% approvals. The report noted that Indian-born individuals have been the biggest beneficiaries of H-1B approvals every year since 2010.
Tangent
Initial confusion over the $100,000 fees’ applicability triggered panic among some H-1B holders visiting India. Meta and Microsoft sent internal emails to employees urging H-1B visa holders to return to the U.S. immediately and avoid leaving the country for the “foreseeable future.” The Indian Express reported that this led to a flurry of last-minute bookings for India—U.S. flights, causing air fares on the route to spike. Some users on the 4chan messaging board /pol/, attempted to further disrupt these bookings by urging others on the alt-right forum to “clog the flight reservation system” by initiating bookings on popular India to U.S. routes without completing the payment process. It is unclear if this move had any impact on fares. White House Press Secretary Karoline Leavitt eventually issued a statement attempting to clear up the confusion, saying: “Those who already hold H-1B visas and are currently outside of the country right now will NOT be charged $100,000 to re-enter…This applies only to new visas, not renewals, and not current visa holders.” The statement also noted: “This is NOT an annual fee. It’s a one-time fee that applies only to the petition.” However, this directly contradicted Commerce Secretary Howard Lutnick’s remarks that companies would have to pay the $100,000 fee annually.
Further Reading
What Are H-1B Visas? Trump’s $100,000 Fees Could Impact Amazon, Apple And Google. (Forbes)
Trump Will Charge $100,000 Fee For H-1B Visas (Forbes)
