US visa reform bill sends Indian IT stocks tumbling

A new bill introduced over the past week in the US Congress to overhaul the rules for immigration of highly-skilled workers has sent Indian IT stocks lower.

The High-Skilled Integrity and Fairness Act of 2017, tabled in the House of Representatives by Republican California congresswoman Zoe Lofgren, calls for minimum wages of H-1B visa holders to be set at $130,000 (£105,000) – more than double the current $60,000.

The bill is intended to make it harder for US companies to replace American employees with skilled foreign workers, including from India.

The development sent shares in Tata Consultancy Services, one of the world's biggest IT services firms, more than 4% lower in Mumbai on 31 January.

Shares in HCL Technologies also dipped 4% while those in Infosys were down 2%.

"My legislation refocuses the H-1B programme to its original intent – to seek out and find the best and brightest from around the world, and to supplement the US workforce with talented, highly-paid, and highly-skilled workers who help create jobs here in America, not replace them," Lofgren said on 24 January.

"It offers a market-based solution that gives priority to those companies willing to pay the most. This ensures American employers have access to the talent they need, while removing incentives for companies to undercut American wages and outsource jobs."

Lofgren's office told Politico that the bill closely resembles the approach taken by President Donald Trump's administration to crackdown on abuse of the H-1B visa programme.

India is one of the largest exporters of IT services in the world.