Indian IT Stocks Fall on Higher U.S. Visa Fees

Coforge led the decline, closing 5.4% lower after its chairman and independent director O.P. Bhatt resigned, adding a company-specific overhang to the broader sector selloff. Infosys, Tech Mahindra, HCLTech, MphasiS, TCS, Persistent Systems and Wipro fell as much as 4%, underscoring how quickly policy risk in the U.S. can translate into valuation pressure for Indian exporters.

The economic impact is straightforward: higher visa fees act like a tax on the offshore-delivery model. For firms with large U.S. workforces, a $4,000 charge on each H-1B extension and $4,500 on each L-1 can turn an occasional compliance cost into a recurring drag on operating margins, especially if staffing needs remain sticky. Analysts said the market is also worried that tougher scrutiny of permanent labour filings could complicate staffing and raise the administrative burden around green card pipelines, further increasing the cost of keeping key personnel in place.

That matters for investors because the selloff hits a sector that has already underperformed this year and is vulnerable to any deterioration in earnings visibility. Indian IT companies trade partly on the promise of stable dollar revenues and predictable cash generation; anything that raises delivery costs or delays contract execution tends to pressure multiples first and earnings later. Choice Broking said the Nifty IT index was rejected from the 31,900-32,000 zone, with the 200-day exponential moving average acting as a cap, while its relative strength index reading near 35 points to weak near-term momentum.

There is also a wider macro read-through. Higher U.S. borrowing costs, still-firm employment data and a hawkish Federal Reserve backdrop already make enterprise clients more cautious about discretionary technology spending. Add geopolitical stress, rising crude prices and a stronger risk-off tone in global equities, and the setup for Indian IT becomes less forgiving. Wall Street’s overnight decline and a weaker Nasdaq added to the pressure, while Cognizant shares fell nearly 4%, reinforcing concerns that the visa issue is not just an Indian market story but a sector-wide margin question.

The bull case is that core deal activity has not broken down and that much of the current weakness reflects sentiment rather than a sudden collapse in demand. The bear case is that the visa hike and stricter enforcement arrive just as AI-driven productivity gains and softer client budgets limit pricing power, leaving firms with less room to absorb higher onsite costs. For now, investors are treating policy risk as an immediate earnings headwind, and the next catalyst will be whether companies absorb the hit through margins, pass it on to clients or change delivery mix faster than expected.