Shares of India’s top IT firms dropped sharply after the US announced a $100,000 fee for new H-1B visas. Tech Mahindra fell nearly 5%, while Infosys, Wipro, TCS, and HCLTech lost over 2.5% each. The Nifty IT index fell almost 3%, reflecting investor concerns over rising costs.
The visa fee hike puts pressure on Indian IT’s traditional on-site business model, which relies heavily on deploying engineers in the US. Companies may adapt by moving work offshore, hiring locally at higher wages, or expanding automation. Analysts warn that these measures could reduce profit margins in the short term.
On a positive note, Japan upgraded India’s sovereign rating to BBB+ with a stable outlook, boosting confidence among foreign investors. This move is expected to attract higher global capital inflows.
On the domestic front, the rollout of GST 2.0, which simplifies tax slabs and reduced rates on essentials, is likely to boost consumption during the festive season. Experts predicts a mix market trend, with IT stocks facing global headwinds, while domestic consumption driven sectors gain momentum.
