Shares of Indian IT giants Infosys and Wipro witnessed a notable decline on the New York Stock Exchange (NYSE) after U.S. President Donald Trump issued a fresh executive order on the H1-B visa program. The move, which restricts the entry of foreign workers under the scheme, has triggered concerns for India’s multi-billion-dollar IT services sector, which relies heavily on H1-B visas to deploy talent for American clients.
The H1-B Visa Order
The executive order, signed late Tuesday, is designed to tighten the issuance of H1-B visas, a program that has long allowed skilled foreign workers—particularly from India—to work in the United States. The order includes provisions for stricter eligibility criteria, higher minimum wage requirements, and an overall reduction in the annual quota.
According to the Trump administration, the decision is aimed at “protecting American jobs” and ensuring that companies prioritize hiring domestic workers. However, analysts say the policy is likely to disrupt the operations of Indian IT firms, which send thousands of engineers to the U.S. every year.
Impact on Infosys and Wipro ADRs
Infosys and Wipro, two of India’s largest IT service exporters, saw their American Depositary Receipts (ADRs) decline by nearly 5% and 4% respectively in Wednesday’s trading session. The dip reflects investor unease over the potential financial impact of the visa restrictions.
Market experts note that both companies generate a significant portion of their revenue from U.S. clients, particularly in banking, healthcare, and technology sectors. Any disruption in workforce mobility could increase costs, delay project delivery, and reduce competitiveness against U.S.-based firms.
Investor Concerns
Investors fear that the new rules will force Indian IT majors to hire locally in the U.S., significantly driving up operational costs. The average annual wage for a U.S.-based software engineer is much higher than for an engineer deployed from India on an H1-B visa.
Brokerage houses have downgraded outlooks for several Indian IT firms, citing lower margins and potential revenue slowdown. Analysts say this could also trigger a wave of restructuring, with firms opting to expand delivery centers in India and rely more on remote working models.
Industry Reactions
The National Association of Software and Service Companies (NASSCOM) criticized the order, stating that it undermines the collaborative nature of the U.S.-India technology partnership. Industry leaders warn that restricting access to global talent could slow down U.S. innovation and make it harder for companies to fill specialized roles.
Executives from Infosys and Wipro have expressed concerns but emphasized that their companies are already increasing local hiring in the U.S. Infosys, for instance, has expanded its innovation hubs in Indiana and Texas, while Wipro has boosted onshore recruitment to comply with earlier visa tightening measures.
Wider Economic Implications
Beyond Infosys and Wipro, the order is expected to affect other Indian IT players like TCS, HCLTech, and Tech Mahindra, all of whom have large U.S. operations. Collectively, the IT sector contributes nearly 8% to India’s GDP, with the U.S. being its largest export market.
Economists argue that the visa restrictions could also strain India-U.S. trade relations, particularly at a time when both nations are seeking closer economic and strategic ties.
Political Reactions
Indian policymakers have expressed disappointment over the U.S. decision, urging Washington to reconsider. They argue that Indian IT professionals not only contribute to the U.S. economy but also play a crucial role in bridging the tech talent gap.
Opposition leaders in India have accused the government of failing to protect the interests of Indian workers abroad, demanding stronger diplomatic intervention.
Market Outlook
Analysts believe the negative sentiment may persist in the short term as investors price in the risks of the new visa rules. However, some argue that the IT sector has weathered similar storms before, adapting to protectionist policies by increasing automation, expanding nearshore centers, and investing in upskilling.
The real test will be how quickly companies like Infosys and Wipro can adjust their business models to minimize disruption.
