Trump Strikes Indian IT Again: Why Indian Tech Stocks Lost Rs 55,000 Crore in a Single Session

By NiraDha News Editorial Team

September 9, 2026

Indian technology stocks came under renewed pressure after the United States Department of Labor suspended Cognizant’s filings under the Permanent Labor Certification programme, commonly known as PERM, as American authorities investigate alleged fraud and possible harm to U.S. workers. The development immediately revived concerns among investors about tighter scrutiny of employment-based immigration programmes under the Donald Trump administration, particularly because major Indian technology companies continue to have significant business and workforce exposure to the United States. The resulting sell-off wiped out approximately Rs 55,000 crore in combined market value from Indian technology stocks in a single trading session, turning immigration policy and employment-visa scrutiny into a fresh market concern for the Indian IT sector. citeturn2news23turn1view1

Why Indian IT Stocks Fell

The immediate trigger for the market decline was the U.S. Department of Labor’s decision to suspend Cognizant’s PERM filings. PERM is an important part of the U.S. employment-based green-card process because employers generally have to demonstrate that qualified and available American workers are not available for the position and that employing a foreign worker will not adversely affect the wages or working conditions of similarly employed U.S. workers. The programme therefore sits at the intersection of immigration, employment policy and corporate hiring practices, making any investigation involving a major technology company particularly significant for investors. citeturn1view1turn2view0

The announcement was made by U.S. Department of Labor Inspector General Anthony D’Esposito, who said that Cognizant’s PERM filings had been suspended while authorities worked with Labor Department officials and the White House Fraud Task Force. The investigation is connected to alleged fraud involving employment-visa programmes, although the authorities have not publicly disclosed the specific allegations against Cognizant, the number of applications affected or how long the suspension will remain in effect. Importantly, the announcement itself does not establish that Cognizant has been criminally charged, and the available government statements did not identify criminal charges against Cognizant or Cloudera, whose PERM filings were also suspended. citeturn1view1turn2view0

Infosys, TCS, HCL Tech and Other IT Stocks Come Under Pressure

The market reaction was not limited to Cognizant because Cognizant is part of a much broader Indian technology-services ecosystem that depends heavily on the U.S. market. According to ETMarkets, Infosys fell more than 3%, while Tech Mahindra, HCL Technologies and Persistent Systems declined by around 3% each. TCS, Mphasis, Wipro and LTIMindtree fell by roughly 2%, reflecting the concern that stricter U.S. scrutiny could eventually have wider implications for the technology-services industry rather than remaining an isolated issue involving a single company. citeturn2search0

The important point for investors is that the market reaction was driven primarily by expectations and risk perception rather than by evidence that every major Indian IT company has been subjected to the same enforcement action. The suspension announced by the U.S. authorities specifically involved Cognizant and Cloudera, while concerns surrounding companies such as TCS, Infosys, Wipro and HCLTech reflect the possibility of broader regulatory scrutiny because these companies also operate extensively within U.S. employment and immigration frameworks. citeturn2search0turn2view0

What Exactly Is PERM?

PERM stands for Program Electronic Review Management, the U.S. Department of Labor process used by employers seeking to sponsor eligible foreign workers for permanent employment-based immigration. In a typical PERM process, an employer must establish that there are not sufficient qualified and available U.S. workers for the relevant position and that hiring the foreign worker will not negatively affect the wages and working conditions of similarly employed American workers. Once the labor certification process is completed successfully, it can become an important step in an employment-based green-card pathway. citeturn2view0turn1view1

It is important not to confuse PERM with the H-1B visa programme. H-1B allows eligible U.S. employers to employ foreign professionals temporarily in specialty occupations, whereas PERM is associated with permanent employment and employment-based green-card sponsorship. Therefore, the suspension of Cognizant’s PERM filings does not automatically mean that Cognizant’s H-1B petitions have also been suspended. This distinction is crucial because the two programmes serve different immigration purposes and operate through different stages of the U.S. employment-based immigration system. citeturn1view1

Why Cognizant Matters to India’s IT Industry

Cognizant occupies a particularly important position in the discussion because the company has deep historical and operational connections with India while being headquartered in the United States. Cognizant was founded in Chennai in 1994 and is now headquartered in Teaneck, New Jersey, where it is listed on the Nasdaq under the ticker symbol CTSH. The company continues to maintain a substantial workforce and operational presence in India, making developments involving its U.S. immigration and labor practices closely watched by Indian technology investors and employees. citeturn1view1

According to India Today, Cognizant had received approvals for 3,510 H-1B visa petitions as of June 30, compared with 9,413 approvals in 2020. The decline illustrates that the company's dependence on the H-1B programme has already changed significantly over time, although the U.S. remains a strategically important market for the company and for the wider Indian IT-services industry. citeturn2view0

A New Layer of Pressure for Indian Technology Companies

The latest development arrives at a time when Indian technology companies are already navigating multiple structural changes, including artificial intelligence, changing client spending patterns, geopolitical uncertainty and increasing pressure to deliver technology services through a more geographically diversified workforce. The U.S. government's renewed focus on employment-visa compliance adds another layer of uncertainty to an industry whose business model has historically relied on moving highly skilled professionals across borders to serve international clients.

For Indian IT companies, the issue is not simply about the number of visas that can be obtained. Immigration restrictions can influence how quickly companies deploy employees to client locations, how they manage staffing costs, where they establish delivery centres and how they structure long-term workforce planning. If U.S. scrutiny becomes broader or more prolonged, companies may increasingly accelerate local hiring in the United States while expanding delivery and engineering capabilities in India and other countries.

Cognizant Was Expanding Its U.S. Workforce

The timing of the announcement is particularly notable because Cognizant had announced plans to expand its American workforce shortly before the suspension became public. The company said it planned to hire 1,500 U.S. college graduates and increase its Frontier Certified Engineer and Frontier Business Operator workforce to 15,000 people. Cognizant also said it had joined RAISE US, a bipartisan coalition focused on helping American workers transition into the artificial-intelligence economy. citeturn1view1

Cognizant CEO Ravi Kumar S. said the company was hiring American graduates, creating new American job categories for the AI era and investing in a broader effort aimed at helping workers adapt to changes brought by artificial intelligence. The company also highlighted its Synapse programme, which has trained more than one million people and has an objective of reaching two million people by 2030. citeturn1view1

The juxtaposition is significant. On one side, Cognizant is publicly emphasizing greater investment in American workers and new AI-related employment opportunities. On the other side, the U.S. Labor Department has temporarily stopped the company from filing new PERM applications while authorities investigate alleged issues connected with employment-visa programmes. The two developments underline how closely technology, workforce policy and immigration regulation are now becoming connected in the United States.

Why Investors Are Worried About a Wider Crackdown

The biggest concern for investors is not necessarily the immediate financial impact of the PERM suspension on Cognizant alone. Instead, the market is attempting to assess whether the action represents the beginning of a wider enforcement campaign involving large technology employers that depend on foreign skilled workers.

U.S. Labor Department officials have made clear that the investigation is being conducted in coordination with other federal authorities, including the White House Fraud Task Force. The department has also taken action involving Cloudera, whose PERM filings were separately suspended. The simultaneous attention on more than one technology company has contributed to speculation that additional employers could come under scrutiny as investigators examine allegations of fraud and compliance with employment-visa rules. citeturn1view1turn2view0

However, investors should distinguish between confirmed regulatory action and market speculation. At present, the publicly reported suspension applies to Cognizant and Cloudera, and there is no evidence in the cited announcements that TCS, Infosys, Wipro or HCLTech have been placed under the same PERM suspension. The decline in their shares reflects investor concern about possible sector-wide consequences rather than a confirmation that those companies are facing identical enforcement action. citeturn2news23turn2view0

The Bigger Question: Can Indian IT Adapt?

Indian IT companies have already been moving toward a more diversified workforce model, with greater investment in local hiring, global delivery centres and offshore engineering capabilities. The latest U.S. action could accelerate that transition if companies determine that immigration-related uncertainty is becoming a more significant operational risk.

For decades, the traditional model involved combining highly skilled workers in India with employees deployed at client locations in markets such as the United States. That model helped companies provide specialized services while maintaining flexibility in managing global projects. But rising immigration costs, regulatory scrutiny and changing technology requirements are gradually encouraging companies to reconsider how much work needs to be physically performed in the United States.

Artificial intelligence could further strengthen this shift. As more technology work becomes possible through distributed teams, cloud platforms and AI-assisted engineering, companies may be able to perform a larger share of development, testing, analytics and support activities from India or other global delivery centres. At the same time, U.S. clients may increasingly expect technology companies to maintain a meaningful local workforce for customer-facing, regulatory and strategic functions.

What This Means for Indian IT Employees

For Indian technology professionals, the development could have mixed consequences. A stricter U.S. immigration environment could make overseas deployment more difficult for some employees and could reduce opportunities that depend on long-term U.S. immigration sponsorship. At the same time, companies could respond by expanding high-value roles in India, particularly in artificial intelligence, cybersecurity, cloud computing, engineering, data science and global delivery.

The long-term effect therefore depends on how companies respond. If businesses simply reduce international hiring, some employees could face fewer opportunities for overseas assignments. If companies instead use the changing environment to build larger high-value technology centres in India, the country could benefit from additional engineering, research and development and global capability-centre activity.

What Happens Next?

The immediate focus will remain on the U.S. Labor Department's investigation and on whether the suspension involving Cognizant is temporary or becomes part of a broader regulatory action. Authorities have not publicly specified how long the PERM suspension will remain in place, nor have they disclosed the full details of the allegations under investigation. Those unanswered questions make it difficult for investors to determine the eventual financial impact on Cognizant or the broader technology-services industry. citeturn1view1

For Indian IT companies, the next important signal will be whether additional employers face similar investigations or whether the current actions remain limited to the companies already identified by U.S. authorities. A broader investigation could create additional pressure on technology stocks because investors would have to reassess workforce costs, immigration exposure and the economics of delivering services to U.S. clients.

The Bottom Line

The loss of approximately Rs 55,000 crore in market value from Indian technology stocks in a single session demonstrates how sensitive the sector remains to U.S. immigration and labor-policy developments. The immediate trigger was the suspension of Cognizant's PERM filings, but the market reaction reflected a much larger concern: investors are increasingly pricing in the possibility that the United States could take a tougher approach toward employment-visa compliance and foreign-worker programmes. citeturn2news23turn2search0

For now, the action against Cognizant should not be interpreted as a blanket suspension of Indian IT companies or as proof that every major Indian technology firm is facing the same investigation. PERM and H-1B are separate programmes, and the publicly available information does not establish that Cognizant's H-1B petitions have been suspended. The crucial issue going forward will be whether the U.S. investigation remains company-specific or develops into a wider regulatory campaign affecting the broader technology-services industry. citeturn1view1

What is already clear, however, is that the relationship between technology services, immigration policy and geopolitics has become an increasingly important factor for Indian IT companies and their investors. As the United States strengthens scrutiny of employment-visa programmes, India's technology sector may be forced to accelerate a transformation that was already underway: building more high-value capabilities in India, increasing local hiring in key overseas markets and reducing dependence on any single immigration pathway.

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