The Indian IT sector faced a significant challenge as the Trump administration imposed a substantial $100,000 one-time fee on fresh H-1B visas, a move that particularly affects Indian tech workers. Despite this setback, industry leaders Tata Consultancy Services (TCS) and Infosys are expected to weather the storm better than their peers, according to Moody's Ratings.

Impact on Indian IT Giants

Moody's assessment highlights that TCS and Infosys are well-positioned to absorb the increased costs associated with the new H-1B visa fees. This resilience is attributed to their:

• Higher profitability
• Strong balance sheets
• Increased focus on local hiring in the United States

The rating agency's confidence in these IT majors comes at a crucial time when the entire sector is grappling with rising operational costs.

Broader Implications for the IT Sector

The steep rise in H-1B visa fees is set to increase operating costs for Indian IT services companies across the board. Adding to the industry's concerns is the proposed 'HIRE Act', which could potentially impose a 25% tax on US companies that outsource to foreign entities.

Market Reaction

The news had an immediate impact on the Indian stock market:

Adaptation Strategies

Indian IT companies have been proactively addressing visa-related challenges:

• Reduced dependence on H-1B visas
• Increased local hiring in the United States

These strategies are expected to help mitigate some of the impacts of the new visa regulations.

Potential Economic Repercussions

Moody's also pointed out broader economic implications:

• Fewer skilled workers migrating to the US could lead to reduced remittance inflows to India
• India received approximately $129 billion in inward remittances
• Of this, $32 billion came from the United States

Looking Ahead

While the increased H-1B visa fees present a significant challenge to the Indian IT sector, companies like TCS and Infosys appear to be in a strong position to navigate these changes. Their financial strength and adaptive strategies may serve as a model for other companies in the industry as they confront these new regulatory and economic pressures.

As the situation continues to evolve, the Indian IT sector's resilience and adaptability will be crucial in maintaining its competitive edge in the global market.

Infosys , one of India's leading IT services companies, saw its US-listed shares decline following President Donald Trump's executive order imposing new restrictions on H-1B visas. The move has sent ripples through the Indian IT sector, which heavily relies on these visas for its operations in the United States.

Impact on Infosys and Other IT Giants

Infosys' American Depositary Receipts (ADRs) fell by 4.00% in response to the news, while fellow Indian IT major Wipro saw its ADRs drop by 2.00%. The executive order introduces new hurdles for H-1B visa applications, including a substantial $100,000 payment requirement for petition applications, with the possibility of denial for non-payment.

Analysts' Perspective

While the new restrictions present a significant challenge, industry analysts do not view them as an existential threat to Indian IT companies. The impact is expected to be manageable, albeit potentially costly for firms like Infosys that have a significant presence in the North American market.

Market Implications

• North America accounts for one-third to two-thirds of revenue for many Indian IT firms, underscoring the importance of the U.S. market.
• The Nifty IT index had seen gains of 1-3% in the previous week, but the new visa restrictions may affect market sentiment when Indian markets open.
• Current H-1B visa holders in the United States are not immediately impacted by these new rules.

Looking Ahead

As the Indian IT sector grapples with these new challenges, companies like Infosys may need to reassess their staffing strategies and operational models in the U.S. market. The industry will be closely watching for any further developments or clarifications regarding the implementation of these new visa restrictions.

Upcoming Infosys Board Meeting

In related news, Infosys has announced a board meeting scheduled for October 15 and 16, 2025. The meeting agenda includes:

1. Approval of audited consolidated financial results for Q2 FY2026
2. Approval of audited standalone financial results for Q2 FY2026
3. Consideration of interim dividend declaration

Infosys plans to hold investor and analyst calls on October 16, 2025, to discuss the financial results and provide a business outlook. This meeting, while not directly related to the visa restrictions, will likely address any potential impacts on the company's operations and strategies moving forward.