Will $100,000 H-1B fee hit Indian IT stocks on Monday? Investors jitter as ADRs slide, long-term outlook remains cautious

A sudden spike in H-1B visa fees has thrown the Indian IT sector into uncharted waters. Investors are recalculating risks as a key cost pillar—the US-bound talent pool—faces unprecedented charges, potentially reshaping the profitability of India’s software exporters.

US President Donald Trump announced that new H-1B visas will now attract a fee of $100,000. A White House official clarified that the hike applies only to fresh applications, but the signal alone rattled markets. With more than 70% of H-1B visa holders being Indian, the sector faces immediate cost pressures.



The shock was visible in markets, with American Depository Receipts (ADRs) of leading IT firms, including HCL Tech, TCS, Infosys, and Wipro, plunging sharply, according to an ET report. Analysts said sentiment may take a bigger hit than fundamentals in the near term.

Nilesh Shah, MD of Kotak Mahindra AMC, told ET “We have to create an ecosystem in India so that our talent doesn’t have to go abroad. Steps like abruptly changing H-1B norms will eventually have adverse effects on the US economy as well.”

Kranthi Bathini of WealthMills Securities said the $100,000 fee is a big blow. "It was completely unexpected. This will increase costs and squeeze margins. The extent of the impact will depend on how the situation unfolds," he told ET.

He advised long-term investors not to panic “Indian IT firms have weathered global shocks and economic slowdowns in the past. Balance sheets remain strong. Those invested for the long haul can afford to wait and watch.”

Indian IT firms are already grappling with weak earnings, slowing global demand, and potential AI-driven revenue declines. Jefferies recently warned that AI could trigger up to 20% revenue deflation in IT services between 2025 and 2030, with high-margin businesses likely to bear the brunt. Sector growth is projected under 4% CAGR, with persistent margin pressure.

Foreign institutional investors have already pulled nearly Rs 62,000 crore from Indian IT stocks this year. Trump’s move may accelerate this trend, at least temporarily.

So far in 2025, TCS has slumped 23%, Infosys 18%, HCL Tech 23%, and Wipro about 15%. Among mid-tier players, Happiest Minds Technologies has dropped 20%, while LTIMindtree has limited losses to around 3%.

Monday will be closely watched for signs of domestic buying or continued panic-selling. Either way, the H-1B fee hike adds another layer of uncertainty to a sector already facing multiple challenges.

(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)