Indian tech stocks slump after Trump imposes $100,000 application fee for H-1B visas

• Indian tech stocks fell Monday after the White House imposed a $100,000 H-1B visa application fee.
• The NIFTY IT index slid nearly 3% as stocks such as Mphasis fell almost 5%.
• Jefferies analysts called the visa fee a "curveball" for the Indian IT sector.

Indian technology stocks slumped on Monday after the Trump administration announced a new $100,000 application fee for the H-1B visa program for skilled workers.

Indian nationals account for more than 70% of all H-1B visa holders, most of whom work in computing and engineering.

India's tech-heavy NIFTY IT index fell nearly 3% on Monday, led by shares of Mphasis, a tech services and consultancy firm, which closed 4.7% lower. Other index constituents — LTIMindtree, Coforge, and Persistent Systems — also fell by more than 4%.

Mphasis stock fell despite the company saying in a stock exchange filing that it didn't expect the visa charge to impact its financials or operations.

The firm, which has offices in several US states, said it has only made around 130 new applications for H-1B visas this year.

It added that it has reduced its reliance on the program through local hiring, acquisitions, and partnerships, and said that it plans to address any challenges on this front with AI tools.

Jefferies analysts said in a note viewed by Reuters that the H-1B change was a "curveball" for the Indian IT sector.

"The H-1B fee will constrain talent supply in the US, which in turn will drive up demand for locals/green card holders," they wrote, adding, "IT firms will have to pay these employees more or risk losing them."

The rollout of the fee caused significant confusion. Commerce Secretary Howard Lutnick initially said it would be an annual charge levied not only on new applicants but also existing visa holders and those renewing their visas, but the White House later clarified it would be a one-off charge for new applicants.