A US federal court has invalidated a Trump-era executive order that sought to impose a hefty $100,000 fee on new H-1B visas for highly skilled foreign workers. US District Judge Leo Sorokin in Boston ruled the fee an unlawful tax, stating that Congress had never authorized such a charge. This decision is expected to significantly impact Indian IT majors, including Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies, and Tech Mahindra, whose shares are now under close observation.
Indian IT companies derive more than 50% of their revenue from the United States and have historically been among the largest sponsors of H-1B visas. The striking down of this substantial fee is anticipated to generate positive sentiment within the IT sector, following a previous session where weakness in IT stocks led the Nifty IT index to fall by 356 points to 28,653.
H-1B Visa Program and Industry Shifts
Despite their traditional reliance, Indian IT firms have seen a notable decline in their H-1B visa usage in recent years, with industry estimates suggesting a nearly 40% reduction. This shift is attributed to a combination of factors, including increased application and compliance costs, heightened regulatory scrutiny, and ongoing policy uncertainties in Washington.
These challenges have prompted a strategic pivot towards local hiring within the U.S. and have also contributed to a growing trend of skilled technology professionals returning to India. The H-1B visa program annually allocates 65,000 visas under its regular cap, with an additional 20,000 reserved for applicants holding advanced degrees from US institutions. These visas are typically granted for an initial period of up to three years, with the possibility of extension for a total of six years of work in the United States. Historically, employers sponsoring foreign workers under this program incurred filing and processing costs ranging from approximately $2,000 to $5,000 per application.