**H-1B Worries: What to Expect from Indian IT Stocks Tomorrow**
*By Dwaipayan Roy | Sep 21, 2025, 11:30 AM*
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Indian IT stocks are under significant pressure following a recent announcement by US President Donald Trump that has sent shockwaves through the sector. The US has imposed a massive hike in the H-1B visa fees, setting the new annual fee for fresh applications at $100,000.
While this steep increase applies only to new applications, it is causing considerable concern as over 70% of H-1B visa holders are Indians, who form a large part of the Indian IT workforce in the US.
### Market Reaction: ADRs Crash
The announcement has had an immediate and visible impact on the market. American Depository Receipts (ADRs) of top Indian IT companies have crashed in the hours following the news. The move is viewed as a significant blow to the Indian IT sector, which heavily depends on the US market and H-1B visas to supply skilled labor.
Despite the short-term market upheaval, many analysts believe this may affect stock sentiment more than the fundamental health of these companies.
### Investor Guidance: Increased Costs to Hurt Indian IT Exporters
Kranthi Bathini of WealthMills Securities cautioned investors about the near-term impact of increased costs on Indian IT exporters. “The $100,000 annual fee is a big blow. It was completely unexpected,” he said.
However, Bathini also advised long-term investors not to panic, pointing out that Indian IT firms have historically weathered global shocks and economic downturns successfully.
### Sector Challenges: Earnings, Demand, and AI Threats
The timing of this announcement is particularly unfortunate for Indian IT firms. They are already grappling with weak earnings, slowing global demand, and emerging threats from rapid advancements in artificial intelligence.
In fact, Jefferies recently warned that AI could trigger up to a 20% revenue deflation in IT services between 2025 and 2030, adding further pressure on the industry.
Furthermore, foreign institutional investors have pulled nearly ₹62,000 crore from Indian IT stocks this year, reflecting increasing caution in the sector.
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**In Summary**, while the hike in H-1B visa fees poses a significant short-term challenge for Indian IT stocks, experts suggest that fundamentals remain intact. Investors should remain vigilant but not lose sight of the long-term resilience demonstrated by the industry.
https://www.newsbytesapp.com/news/business/it-stocks-crash-after-trump-announces-h-1b-visa-fee-hike/story
