Trump strikes Indian IT again! Why tech stocks lost Rs 55,000 crore in a single session

Indian technology stocks lost about Rs 55,000 crore in combined market value on Wednesday after the US suspended Cognizant’s permanent labour certification filings, reviving concerns over the impact of the Trump administration’s campaign against alleged visa fraud.

Infosys led the decline, falling more than 3%. Tech Mahindra, HCL Technologies and Persistent Systems dropped about 3% each, while TCS, Mphasis, Wipro and LTIMindtree declined around 2%.

The selloff came after the US Department of Labour suspended Cognizant’s filings under the Permanent Labour Certification programme, commonly known as PERM. The process is a key step for employers seeking to sponsor foreign workers for employment-based green cards.


The move was announced by Anthony D’Esposito, inspector general at the US Department of Labour, as federal authorities investigate alleged fraud and possible harm to American workers.

“Cognizant’s PERM filings are suspended,” D’Esposito said in a social media post.

“Threats to American workers will NOT be tolerated. Alongside @WHFraudTF, we’re following facts, fraud and finances. Handcuffs await,” he said.

Also Read | US suspends Cognizant green card filings

D’Esposito said the investigation was being conducted in coordination with Labour Department officials and the White House anti-fraud task force. He did not disclose the specific allegations against Cognizant, the number of applications affected or the duration of the suspension.

The inspector general separately announced that PERM filings by Cloudera had also been suspended.

“One more. @cloudera: PERM filings SUSPENDED,” he said.

The material released by the inspector general did not identify any criminal charges against either company, nor did it include a response from Cognizant or Cloudera.

The action came a day after Cognizant announced plans to expand its US workforce. The company said it would hire 1,500 US college graduates and increase its Frontier Certified Engineer and Frontier Business Operator workforce to 15,000 people.

“We are hiring American graduates, standing up new American job categories for the AI era, and putting Cognizant’s capital and leadership behind a national coalition built to make sure this transition works for workers,” Chief Executive Officer Ravi Kumar S said.

“We believe AI will create significantly more jobs than it displaces and shift greater value, wages and accountability to the frontlines of America’s workforce,” Kumar said.

Cognizant also said it had joined RAISE US, a bipartisan coalition focused on helping American workers transition into the artificial intelligence economy. Its Synapse programme has trained more than one million people and aims to reach two million by 2030.

Under the PERM programme, the Labour Department must certify that qualified US workers are unavailable for a position and that hiring a foreign worker will not adversely affect the wages or working conditions of similarly employed American workers.

PERM certification is linked to permanent employment and employment-based green cards. It is separate from the H-1B programme, which allows eligible US employers to hire foreign professionals temporarily for speciality occupations. The suspension of PERM filings does not, by itself, establish that a company’s H-1B petitions have also been suspended.

Cognizant is headquartered in Teaneck, New Jersey, and listed on Nasdaq under the ticker CTSH. The company was founded in Chennai in 1994 and retains a major workforce and operational presence in India.

Back on Dalal Street, Coforge shares fell about 9%, though the decline was triggered by a separate development. The company’s chairman, Om Prakash Bhatt, resigned following an audit.

(Data: Ritesh Presswala)

Disclosure: This article has been written by Nikhil Agarwal, who is not a SEBI-registered Research Analyst or an Investment Adviser.

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