The Impact of Trump's H-1B Visa Crackdown on Indian IT Firms and Global Tech Supply Chains

The Trump administration's imposition of a $100,000 annual fee on H-1B visa applications has sent shockwaves through the global tech industry, particularly for Indian IT firms and U.S. technology companies reliant on foreign talent. This policy, announced on September 19, 2025, represents a seismic shift in immigration economics, with profound implications for valuation models, workforce strategies, and innovation ecosystems. For Indian IT-BPM sector giants like Tata Consultancy Services (TCS) and Infosys, the financial burden is immediate and existential.

The Financial Toll on Indian IT Firms

The new fee, a 47-fold increase from the previous $2,000–$5,000 per application, has forced firms to recalibrate their cost structures. TCS, the second-largest H-1B beneficiary in 2025 with over 5,000 approvals, faces an estimated $145.2 million annual cost under the new rules, while Infosys is projected to pay $250.4 million for its 2,504 H-1B workers ^[1]. These figures compound existing challenges, including global economic weakness and prior workforce reductions. TCS, for instance, had already announced plans to cut 12,000 jobs earlier in 2025, a move that now appears insufficient to offset the new financial strain ^[2].

The impact is not merely arithmetic. The policy threatens to disrupt business models built on onshore staffing. Indian IT firms may accelerate offshoring or adopt automation to mitigate costs, but these shifts risk eroding margins and delaying project timelines. Nasscom, the Indian technology industry body, warned that the abrupt rollout could destabilize ongoing projects and create uncertainty for professionals and students New US H-1B visa fee could disrupt Indian IT operations, says industry body^[3].

Market Reactions and Analyst Valuations

The market's response has been swift. On the day of the announcement, Infosys shares fell 4.5%, while TCS and Wipro also saw declines, reflecting investor concerns over profitability and operational flexibility Infosys stock falls 4.5% after Trump's $100,000 H …^[4]. Analysts have since adjusted their valuations. Jefferies cut TCS's price target to ₹3,230 from ₹3,480, maintaining a “Hold” rating, while Infosys received a revised target of ₹1,750 from ₹1,860, albeit with a “Buy” rating TCS, Infosys, Wipro see price targets slashed by Jefferies as AI …^[5]. Wipro's target was reduced to ₹220 from ₹235, with the brokerage expressing a bearish stance TCS, Infosys, Wipro see price targets slashed by Jefferies as AI …^[5].

The skepticism is rooted in macroeconomic headwinds. AI-driven disruptions and slowing global tech spending have already pressured the sector, with Jefferies predicting a 20% revenue deflation in IT services from 2025 to 2030 TCS, Infosys, Wipro see price targets slashed by Jefferies as AI …^[5]. The H-1B fee hike exacerbates these concerns, compounding fears of client spending delays and elevated compliance costs.

Strategic Shifts and Global Supply Chain Implications

U.S. tech companies, including Amazon, Microsoft, and JPMorgan, are also grappling with the fallout. These firms, which rely heavily on H-1B workers for specialized roles, have issued internal advisories urging employees to remain in the U.S. or return promptly Trump’s $100,000 Visa Fee Spurs Confusion and Chaos^[6]. The policy's long-term effect may be a reshaping of global supply chains, with firms accelerating automation or relocating operations to countries with more accommodating immigration policies.

India's Ministry of External Affairs has highlighted the “humanitarian consequences” of the policy, noting its potential to disrupt families and hinder technological progress India: Trump's H-1B Visa Fees Could Have 'Humanitarian Consequences'^[7]. Meanwhile, legal challenges loom, with critics arguing the administration overstepped its authority in imposing such a high fee Trump Moves To Price Out Global Talent With $100K H-1B Visa^[8].

Valuation Risks and Opportunities

For investors, the valuation risks are clear. The immediate financial burden on Indian IT firms could lead to margin compression and reduced earnings growth. However, opportunities may emerge for firms that adapt swiftly. TCS and Infosys, with their strong balance sheets and historical agility, are better positioned to pivot toward AI-driven services and localized hiring H-1B visas: Are TCS, Infosys susceptible to US' immigration policy changes?^[9]. Moody's has noted that these firms' shifts toward high-margin offerings could mitigate some of the policy's impact U.S. H-1B visa policy changes pose challenges for Indian IT sector^[10].

Yet, the sector's resilience is not guaranteed. Smaller firms and startups, less equipped to absorb costs, may struggle, leading to consolidation. The broader U.S. innovation ecosystem could also suffer, as restrictions on global talent flow risk stifling competitiveness in AI and clean energy American labor has a new challenge: Trump’s $100K fee on H-1B …^[11].

Conclusion

Trump's H-1B crackdown is a double-edged sword. While it imposes immediate financial and operational challenges on Indian IT firms and U.S. tech companies, it also compels a reevaluation of long-term strategies. For investors, the key lies in discerning which firms can navigate these headwinds through innovation and adaptability. The valuation risks are significant, but so too are the opportunities for those who can harness AI and restructure their global operations.