President Donald Trump has imposed an annual fee of $100,000 on each H-1B visa application, dealing a severe blow to Indian IT firms. Their shares saw significant drops on Wall Street. This policy shift increases employer costs, alters the US hiring model, and complicates entry for global tech talents into the US.
Following Trump's decision, Infosys ADRs fell by up to 4.5% in New York trading, Wipro dropped 3.4%, Cognizant 4.3%, and Accenture 1.3%, raising investor concerns.
Who Takes the Biggest Hit
Under Trump's announcement, companies must pay for each new or returning H-1B employee and keep proof of payment. For Indian IT firms, which dominate the sector with over 70% of H-1B visa holders, this policy delivers a significant economic blow.
Why America Implemented This Rule
Commerce Secretary Howard Lutnick defended the fee as a means to curb the influx of 'cheap foreign talent' and ensure only 'valuable employees' qualify. The White House cited this as part of a broader restructure to prevent H-1B system 'abuse' and push companies to hire Americans.
Predictions of Major Layoffs
Analysts predict firms like Infosys, TCS, Wipro, Cognizant, and HCL will drastically reduce onsite US staff, reserving H-1Bs for top-tier roles and boosting offshoring and remote delivery models. This could improve margins but limit opportunities for mid-tier Indian tech firms and disrupt career paths linked to green card eligibility.
How Americans Invest in Indian Companies
American Depositary Receipts (ADRs) allow US investors to invest directly in shares of foreign companies like Infosys, Wipro, and Cognizant through exchanges like the NYSE or NASDAQ. This makes it much easier to invest in firms not listed in the US without dealing with foreign markets, currency risks, or complex regulations.
