Indian IT stocks surge despite Trump administration's green card curbs

Indian IT shares rallied in trading Friday despite a significant policy action from the Trump administration targeting the sector's reliance on skilled immigrant workers. The Nifty IT Index jumped 3.31 percent, while leading companies TCS, Infosys, and Wipro all posted gains, confounding analyst expectations of a market downturn.

The Trump administration suspended eight major Indian IT services firms from the PERM labor certification process, which is a critical step in securing permanent resident status through employment-based green cards. The move represents an escalation in restrictions on skilled visa programs that have been a cornerstone of India's technology export industry.

Industry observers had anticipated the policy announcement would weigh heavily on Indian IT stocks, given the sector's historical dependence on H-1B visas and green card pathways to maintain operations in the United States. However, Friday's market performance suggested investors may have already priced in the regulatory risks, or viewed the suspension as a temporary measure unlikely to fundamentally disrupt business operations.

The PERM suspension affects a substantial portion of India's technology services sector, but the positive market reaction indicates confidence among investors that affected companies possess sufficient operational flexibility and alternative strategies to navigate the regulatory environment. The sector remains a significant contributor to India's software exports and foreign exchange earnings, with the United States representing the largest market for Indian IT services.