Infosys, TCS, Wipro: IT stocks trade lower as the US removes lottery system in H1B visa programme; key points to know

Shares of IT services companies such as Infosys, Tata Consultancy Services (TCS), and Wipro, among others, were trading lower in the early trade on Wednesday, December 24, as in a significant change to the H-1B visa programme, the Trump administration announced that it was replacing the random lottery system that selected visa beneficiaries with a process that will prioritise allocation of visas to higher-skilled and higher-paid individuals.

Last seen, the NIFTY IT index was trading 0.54% lower at 38,960.40 levels with nine out of 10 constituents trading in the red.

The biggest drag was Tech Mahindra (down nearly 1%). Next on the list were Coforge, Wipro, and Persistent Systems.

Infosys was trading 0.73% lower, while TCS was down 0.24%.

The new guidance is the latest in an intensifying crackdown by the Trump administration on immigration, both legal and illegal, as well as the H-1B visas, which are used by corporations in the US to hire foreign talent. Indian professionals are among the largest cohort of H1B visa holders in the US.

In a statement on Tuesday, the Department of Homeland Security announced that it is amending regulations governing the H-1B work visa selection process to prioritise the allocation of visas to higher-skilled and higher-paid individuals, thereby better protecting the wages, working conditions, and job opportunities of American workers.

The new rule is effective February 27, 2026, and will be in place for the FY 2027 H-1B cap registration season.

The new system replaces the random lottery for selecting visa recipients with a process that gives greater weight to those with higher skills, it said.

H1B visa programme: What was the lottery system?

The H-1B visa is a US work visa for skilled foreign professionals (mainly in IT, engineering, and science).

Because demand is much higher than supply, the US used a lottery system:

• 65,000 regular H-1B visas
• 20,000 extra for applicants with a U.S. master’s degree or higher
• Total: 85,000 visas per year

Each year, employers file far more applications (often 3–4× the limit).

Since the government couldn’t approve everyone, it used a random lottery to pick which applications would even be considered.

• A highly skilled worker and a less-skilled worker had equal chances.
• Employers couldn’t plan staffing reliably.
• Many qualified candidates were rejected purely by chance.

What does “removal of the lottery” mean?

Instead of random selection, proposals (and partial changes in some years) aim to prioritise visas based on criteria, such as:

• Higher salary offered
• Higher skill level or specialisation
• Advanced degrees
• Critical or niche roles

• Merit-based selection instead of luck-based selection

• Fewer visas for mass hiring
• Large Indian IT firms (like TCS, Infosys, and Wipro) often filed thousands of applications for mid-level roles.
• Merit/salary-based systems favour fewer but higher-paid roles.
• Higher costs
• To qualify, companies may need to offer higher salaries.
• This reduces the cost advantage of offshore Indian IT services.
• Reduced on-site opportunities
• Fewer Indian engineers get U.S. on-site roles.
• Could slow career growth for some professionals

This also means more local hiring in the U.S.

• Indian firms invest more in hiring U.S. citizens or permanent residents
• Improves global presence and reputation

What the US said

The agency said that the lottery system of selecting H-1B visa applicants was rife with abuse and was exploited by companies to bring in foreign labour at low wages.

“The existing random selection process of H-1B registrations was exploited and abused by US employers who were primarily seeking to import foreign workers at lower wages than they would pay American workers,” US Citizenship and Immigration Services (USCIS) spokesman Matthew Tragesser said.

"The new weighted selection will better serve Congress’ intent for the H-1B programme and strengthen America’s competitiveness by incentivising American employers to petition for higher-paid, higher-skilled foreign workers. With these regulatory changes and others in the future, we will continue to update the H-1B programme to help American businesses without allowing the abuse that was harming American workers.”

What will be the impact of the rule changes?

Other changes

In the first year of President Donald Trump’s second term in the White House, the administration has announced a slew of measures to curtail abuse in the H-1B visa programme. The Trump administration announced a USD 100,000 fee on new H-1B visa applications.

From December 15, the State Department has also begun an enhanced screening and vetting of H-1B and its dependent H-4 visas, checking the social media profiles of the applicants.

As a result of this guideline, several H-1B visa interviews scheduled across India have been postponed and pushed months ahead, leaving many visa holders who had travelled to India for their visa stamping stranded.

The State Department has underscored that a US visa is a privilege, not a right, and said that it uses all available information in visa screening and vetting to identify visa applicants who are inadmissible to the United States, including those who pose a threat to US national security or public safety.