Indian technology stocks lost about Rs 55,000 crore in combined market value on Tuesday, September 9, after the US suspended Cognizant's permanent labour certification (PERM) filings, reviving investor concerns over the Trump administration's ongoing campaign against alleged visa fraud.
Which Stocks Were Hit Hardest
Infosys led the decline, falling more than 3%. Tech Mahindra, HCL Technologies, and Persistent Systems each dropped roughly 3%, while TCS, Mphasis, Wipro, and LTIMindtree declined around 2% apiece — a broad-based selloff across virtually every major Indian IT services name.
What Actually Triggered the Selloff
The proximate cause was the US suspending Cognizant's PERM labour certification filings — a program employers use to sponsor foreign workers for permanent US residency by certifying that no qualified American workers are available for the role. The suspension raised fresh concerns about tighter federal scrutiny of the work-visa pathways Indian IT services firms depend on heavily to staff their US operations, along with renewed allegations of visa fraud within the broader outsourcing industry.
Part of a Longer Pattern of Visa-Related Pressure
Tuesday's drop continues a recurring theme that's repeatedly weighed on Indian IT stocks throughout the Trump administration's second term. Just weeks earlier, Indian IT majors saw shares slump after Trump imposed a $100,000 fee on new H-1B visa applications — a move analysts at Jefferies called a "$100,000 curveball for the Indian IT" sector. That earlier announcement sent the Nifty IT sub-index down nearly 3% in a single session, with shares of TCS falling more than 3%, Infosys down 3.19%, and Tech Mahindra and Wipro dropping 3.55% and 2.30% respectively.
ICICI Securities estimated at the time that the H-1B fee hike could knock about 1 percentage point off profit margins and roughly 6% off earnings for IT firms, assuming they continued hiring Indian workers under the program at similar rates. India was, by far, the largest beneficiary of H-1B visas that year, accounting for 71% of approved beneficiaries — underscoring just how disproportionately exposed Indian IT firms are to any policy shift affecting the program.
Why This Sector Is So Sensitive to US Policy
Indian IT services companies earn roughly 57% of their revenue from the United States, and the sector has long relied on US work-visa programs to place Indian engineers and consultants directly with American clients — a business model that's become increasingly politically contentious as it draws criticism from American job-seekers competing against comparatively cheaper Indian labor. That structural dependence means any tightening of visa policy, fee increases, or fraud-related enforcement actions tend to translate quickly and directly into stock-price pressure across the entire sector, rather than affecting just the company named in a given enforcement action.
How Companies Are Adapting
Industry analysts have suggested Indian IT firms will likely respond to sustained visa pressure by reducing reliance on H-1B visas and increasing local hiring within the US, as well as expanding hiring in nearby countries like Mexico and Canada to diversify their delivery footprint away from strict dependence on Indian-visa-based staffing models. Indian IT industry body Nasscom noted that H-1B visas issued to leading Indian and India-centric firms had already fallen to just over 10,000 in 2024, down from nearly 15,000 the year before — suggesting the sector had begun adjusting its visa dependence even before this latest round of pressure.
A Broader Pattern of Tariff and Trade Pressure
This latest IT-specific hit adds to a difficult stretch for Indian markets more broadly this year, following earlier episodes including Trump's reciprocal tariff announcement covering roughly 60 countries — which included a 27% tariff on India and triggered IT stocks tanking as much as 10% in a single session — as well as a separate 10-month market low tied to the initial global tariff rollout, where Indian investors lost nearly Rs 14 lakh crore in a single day.
Additional Context: Leadership Transition
Amid the broader selloff, brokerages also flagged an unrelated but notable development: Infosys has appointed Ashiss Kumar Dash as CEO-designate, with the leadership transition set to take effect on April 1, 2027 — a detail some analysts noted as a factor investors will be weighing alongside the sector's ongoing visa-policy headwinds.
What's Next
With the Trump administration's visa enforcement and fee policies continuing to evolve, and Cognizant's PERM suspension marking the latest flashpoint, Indian IT investors are likely to remain on edge for further policy announcements that could similarly ripple across the sector. For continuing market coverage, see the Economic Times Markets section.