There has been a very important update on last Friday from the United States that directly affects the Indian IT industry. Let me explain this to you in the simplest possible way.
What happened?
The U.S. government, under the new proclamation announced on September 19, 2025, has placed a big restriction on the H-1B visa program. From September 21, 2025, entry into the U.S. on H-1B visas will be blocked for 12 months, unless the sponsoring employer pays a $100,000 surcharge per petition, or the worker qualifies for a national interest exemption. This is in addition to other steps like raising the wage levels for H-1B workers and prioritizing only high-skilled, high-paid employees.
Who is affected?
Indian IT workers outside the U.S. waiting to travel for projects. New H-1B lottery winners and those undergoing consular processing.
Who is safe for now?
Those already inside the U.S. with valid H-1B visas. They can continue working as normal. But if they travel outside, re-entry will be difficult or very expensive.
Why is this important for India?
India is the largest user of H-1B visas, with Indian IT companies sending thousands of engineers to the U.S. every year. According to reports, more than 70% of all H-1B visas go to Indians. This sudden change makes international travel risky and increases costs sharply for Indian IT firms.
Impact on Indian IT Stocks
- Short-term negative sentiment: Stock prices of IT companies may face pressure because of the uncertainty.
- Higher costs: $100,000 per visa is a huge expense. If companies pay, their profits will take a hit.
- Talent mobility issues: It becomes harder to send employees abroad for projects.
- Shift to local hiring: IT firms may be forced to hire Americans locally, which is costlier than sending Indian engineers.
- Existing staff in U.S. safe: Current projects will continue smoothly, so the damage is limited in the near term.
- Medium-term balance: Demand for digital services and offshoring to India may balance the impact over time.
- Large, Medium and small IT firms may feel more pain due to higher dependency on onsite workers.
Final Thoughts:
For Indian IT stocks, this creates worry, As you are aware, we remain negative on the IT sector, so as our investor, it is better to stay cautious on IT stocks in the near term, and avoid aggressive buying in this sector.
Happy and informed investing!
Note: This article is intended for educational purposes only and is not meant to be construed as financial or investment advice. The information provided is based on publicly available data and is intended to help readers understand the potential future outlook. Before making any investment decisions, it is important to conduct thorough research and consult with a qualified financial advisor
