Cognizant US Visa Probe: Why Indian IT Stocks Lost ₹55,000 Crore

By Shefali Rana | BizGossips.in

The US crackdown on employment-based immigration has now put Cognizant in the spotlight, and the development could have consequences far beyond one company.

The US Department of Labor has suspended Cognizant’s new PERM labour certification filings amid an investigation into alleged fraud and abuse involving the H-1B and PERM visa programmes. Cloud software company Cloudera has also faced a suspension of its PERM filings.

The language coming from US authorities has been particularly aggressive. Labor Department Inspector General Anthony D’Esposito said investigators are working with the White House Fraud Task Force and are following “facts, fraud and finances.”

For Indian IT companies, that is hardly comforting.

PERM is an important part of the employment-based green card process. It generally requires employers to demonstrate that qualified US workers are not available for a particular position and that hiring a foreign worker will not negatively affect US workers’ wages and working conditions.

However, there is an important distinction: Cognizant has not been declared guilty of fraud. The suspension concerns new PERM filings while the investigation continues, and authorities have not publicly established that Cognizant itself committed wrongdoing.

Yet the stock market did not wait for a final verdict.

Indian technology stocks collectively lost around ₹55,000 crore in market value in a single trading session. Infosys fell more than 3%, while Tech Mahindra, HCL Technologies and Persistent Systems also declined around 3%. Other major IT names, including TCS, Wipro, Mphasis and LTIMindtree, were also under pressure.

And this is where the story becomes bigger than Cognizant.

Why should an investigation involving one company wipe billions of rupees off the value of an entire sector?

Because investors know the uncomfortable truth: Indian IT remains deeply exposed to the US market and its immigration policies.

For years, access to American clients, projects and skilled-worker visa programmes has been a crucial part of the Indian IT growth model. When Washington tightens the rules, the impact is felt almost immediately in Bengaluru, Mumbai, Hyderabad and on Dalal Street.

The timing also raises eyebrows.

Cognizant recently announced plans to hire 1,500 US college graduates and expand its workforce in newer technology and AI-related roles. Yet the company is simultaneously facing scrutiny over its employment-based immigration filings.

That creates a difficult question for the industry: Is localisation finally becoming unavoidable, or is the US simply raising the cost of doing business for companies dependent on foreign talent?

The bigger risk for investors may therefore not be this particular investigation.

It is the possibility that tougher visa enforcement becomes a long-term feature of the US technology landscape.

If that happens, Indian IT companies may have to accelerate local hiring, rethink their talent strategies and reduce their dependence on immigration-driven workforce models.

For now, Cognizant is under investigation—not convicted.

But the market has already delivered its warning.

Indian IT may have a US problem, and Washington doesn't need to target the whole sector to make investors nervous.

Disclaimer: This article is for informational and editorial purposes only and does not constitute investment, financial, legal, or immigration advice. Allegations mentioned in relation to the investigation should not be treated as established findings of wrongdoing. Readers should conduct their own research and consult qualified professionals before making investment decisions.