Tata Consultancy Services led the entire software sector sharply lower after the US tweaked a rule governing H1-B Visas, making it difficult for Indian companies to do business in the world's largest software market.
US President Donald Trump, fighting to protect US jobs, doubled the salary requirement for H1-B visas, which allow low paid Indian tech developers to work in the US. Such a worker will now have to be paid $130,000 per year from $60,000 presently, effectively cutting down the cost arbitrage that Indian software developers enjoyed for 3 decades. The bill will have to be approved by the US Senate. Meanwhile, the IT Index plunged 4.4 per cent to 9,722 points, 3-month low.
TCS, the sector leader and the pioneer over four decades in the software outsourcing business, dropped 4.7 per cent to 2,224 rupees, its lowest since November 25.
TCS led all 11 software stocks making up the Nifty IT Index lower between 1.9-5.2 per cent. Infosys Technologies, Wipro, Tech Mahindra and HCL Technologies all lost substantial ground.
Trump, who became the US President on January 20, has been coming out with a series of measures aimed at creating non-tariff barriers to protect the US economy. Earlier, he signed a law banning the entry of people from 7 Muslim-majority nations in a bid to stop potential militants from entering the US mainland. Trump was elected after he promised the electorate steps that would protect local jobs against the onslaught of immigrants.