Indian IT Stocks Rally

After US Suspension of Green-Card Certifications for Major Firms

metro india news  I hyderabad

Indian information technology stocks surged on Friday after the US government suspended several leading IT services companies from the labour certification process required to begin green-card applications for foreign employees. The move, announced on Thursday, affected Tata Consultancy Services, Infosys, Wipro, HCL Technologies, Cognizant, Capgemini, Microsoft and Adobe.

The Nifty IT index climbed more than 1,000 points at one stage during the session. TCS shares rose about 5 percent, while Wipro and HCLTech posted solid gains as well. Investors pointed to TCS’s strong growth numbers, including annualised AI-related revenue that has crossed $3 billion. Market participants also viewed the suspension itself as a factor supporting the rally.

The labour certification step requires employers to demonstrate that they sought American workers for the roles and could not find suitable candidates. Suspension from this process restricts the companies’ ability to sponsor permanent residency pathways for foreign staff. Analysts noted that the development arrives at a time when Indian IT firms have already reduced their dependence on large-scale on-site deployments in the United States.

Engineers based in India typically handle much of the work during US off-hours, while smaller teams travel to client sites and require visas. New H-1B visa surcharges have raised the cost of such hiring. At the same time, global capability centres run by multinational corporations have expanded aggressively. These offshore offices hired nearly twice as many people as traditional IT services firms in the most recent fiscal year.

Data from the National Foundation for American Policy shows a sharp decline in new H-1B approvals for Indian IT companies. Amazon received 4,644 new approvals in fiscal 2025. The top seven India-based IT firms together secured 4,573, a figure 70 percent lower than in 2015. TCS approvals fell from 1,452 to 846 within a year. HCL America dropped from 1,248 to 379. Wipro no longer appears among the top 25 recipients. Amazon was not included on the suspension list.

TCS stated that its certification filings had remained in the single digits for the past two years and that it plans to hire an additional 15,000 people in the United States. Infosys reported 781 filings in 2023 and none since. Comparable recent figures for the other suspended firms were not immediately available.

The action marks the second significant US intervention affecting Indian IT this year. Earlier, after TCS became Anthropic’s partner for enterprise AI in India, a US export restriction limited foreign access to Anthropic’s newest models. Observers had previously suggested that Indian IT could position itself as a neutral layer for integrating and governing multi-vendor AI systems. That positioning becomes more difficult when critical tools or personnel pathways can be restricted from abroad.

American Vice President JD Vance highlighted Microsoft in public remarks. He stated that no company had abused the system more extensively, citing 6,000 American layoffs in 2025 alongside 3,682 PERM applications, nearly a thousand of which matched positions held by the laid-off workers. Microsoft responded that roughly 80 percent of its H-1B filings involved extensions or status changes for existing employees. Labour Secretary Keith Sonderling noted that the named companies have accumulated more than 230,000 H-1B approvals and 100,000 labour certifications since 2009.

Cognizant’s situation drew particular attention. 

The company had pursued an India listing earlier in the year, arguing that a Nasdaq-listed firm operating in the Indian IT style deserved a comparable valuation. Nine months later the US government included it in the suspension following a fraud probe. Cognizant’s new H-1B approvals declined from 2,873 to 743 in a year, while TCS added 4,258 employees in a single recent quarter, indicating limited recent reliance on the green-card pathway among some peers.

As on-site teams shrink, work increasingly shifts to global capability centres, which do not require visas for their India-based staff. More than 1,700 such centres already operate, concentrated heavily in Bengaluru. A former GCC employee observed that decision-making authority continues to rest with headquarters overseas. When a $100,000 fee on fresh H-1B visas was introduced last September, many expected GCCs to gain further advantage, though the shift had already been underway.

Indian IT services firms have been restructuring independently. Midway through last year TCS announced plans to reduce about 12,000 positions, roughly 2 percent of its workforce, focused on middle- and senior-level roles. Industry analysis described the move as potentially the start of broader changes across the sector. Roughly 1,800 GCCs employ around two million people and currently account for only about 35 percent of their parent companies’ technology talent in India, with scope to reach 50 or 60 percent. Banks and other non-traditional employers have intensified competition for this talent through their own centres.

Microsoft and Adobe, both American companies on the suspended list, maintain substantial operations in India. A freeze on domestic certification pathways may further encourage expansion of their Bengaluru and other Indian facilities.

The freeze carries direct consequences for individual workers. Immigration lawyers note that employees approaching the six-year H-1B limit often rely on a pending labour certification to extend their stays. For an engineer in the fifth year, the suspension removes that option. For the companies, analysts anticipate elevated hiring and compliance costs in a sector whose valuations have already declined 30 to 35 percent this year. Infosys’s US-listed shares fell as much as 4 percent overnight before closing 1.1 percent higher.

Washington continues to raise the expense and complexity of on-site staffing models. Indian IT firms, meanwhile, have steadily reduced their reliance on those same models through greater use of offshore centres, domestic hiring and restructuring. The stock-market response on Friday reflected that evolving reality as much as any single growth metric.