September 22, 2025 | Policy Shocks, GST Reset, and a Cautious Open

Good Morning & Market Recap

Indian markets are bracing for a tepid start, with early indicators pointing to marginal gains. The previous session snapped a short winning streak as selling pressure emerged across IT, FMCG, and banking stocks, reflecting growing caution after recent highs.

Today’s setup is materially different, driven by two major policy developments that could influence sector leadership and near-term volatility.

What’s Different Today

The first trigger is a significant change in US immigration policy, with the administration imposing a sharply higher fee on new H-1B visa applications. While later clarified as a one-time charge rather than an annual levy, the headline impact remains substantial for Indian IT services, where onsite staffing plays a critical role in delivery and client engagement.

The second driver is the implementation of a new phase of GST reforms. According to government commentary, these changes aim to accelerate economic growth and further improve ease of doing business by streamlining compliance and operational processes.

Key Watch Factors

Markets will closely track the immediate reaction to the H-1B policy shift, particularly within large-cap IT names and firms with higher onsite exposure. The rollout of new GST regulations will also be watched for early signs of sectoral impact.

Foreign institutional activity remains a key variable, alongside corporate updates from select financial services and technology companies.

Tech Pulse

The Indian IT sector is facing a sharp policy shock as the US implements a substantially higher fee for new H-1B visa applications. The move has introduced uncertainty across an industry deeply tied to US demand and onsite execution models.

While the White House has clarified that the fee applies only to new applications, sentiment remains negative. Analysts expect companies to reassess talent deployment strategies, accelerate offshore delivery, and lean further into automation and local hiring within client geographies.

Large IT exporters are expected to remain in focus as investors evaluate the longer-term implications for margins, pricing, and client engagement models.

Semiconductor Momentum

India’s semiconductor push continues to gather pace, supported by capital expenditure plans from global equipment makers, progress on domestic fabrication projects, and expanding government partnerships. This theme remains a structural tailwind for suppliers across equipment, specialty chemicals, and advanced materials.

Actionable Trigger

Watch for policy clarifications, vendor onboarding updates, and any extensions or enhancements to production-linked incentive frameworks, which could drive follow-through interest in capital goods and specialty chemical names.

Funding Radar

India’s startup ecosystem has seen a renewed uptick in activity, with late-stage funding showing particular strength. Capital has flowed into sectors such as fintech, electric mobility, and B2B services, signaling improving investor confidence after a period of caution.

The primary market remains crowded, with multiple IPOs across mainboard and SME segments. This concentration of supply could test secondary market liquidity and influence short-term flows.

Market Movers & Watchlist

Stocks in focus include defense and shipping-linked names, large-cap IT services, and select infrastructure plays. In the previous session, IT and private banking stocks saw the most pressure, while select PSU and port-related names outperformed.

Within IT services, sentiment remains fragile on policy headlines. Intraday behavior and advance-decline ratios will be important to assess whether any recovery attempts gain traction.

Technical View

The broader index is holding above a key support zone, with immediate resistance overhead. Sectoral action continues to favor power and PSU banking stocks, offsetting weakness in consumer-facing and technology segments.

Quick Bytes

Global cues remain supportive, with US markets extending record highs and Asian equities opening firm. Commodity prices are stable, with crude and gold holding within recent ranges, offering limited macro disruption for domestic markets.

Deep Dive – H-1B Visa Storm: Redefining India’s IT Playbook

What Changed

A sharply higher one-time fee on new H-1B visa applications has raised the cost of onsite staffing. While earlier reports suggested an annual levy, official clarification has reduced structural impact but not headline risk.

Why It Matters

Indian IT vendors derive a significant share of revenue from US clients, where onsite presence supports complex transitions and client intimacy. Higher upfront costs could delay onsite ramp-ups, favor offshore delivery, and influence pricing negotiations.

Second-Order Effects

Higher wage pressure for US-based tech roles may increase interest in near-shore hubs. Indian global capability centers could benefit as enterprises expand in-country delivery. Currency stability and benign energy prices may partially offset margin pressures in the near term.

Investor Takeaway

In the near term, preference may tilt toward large-cap IT firms with higher offshore mix, strong automation leverage, and pricing power. Selectivity is advised in mid-cap names with heavier onsite dependence until policy clarity improves.

What to Watch Today

Markets will track the initial impact of GST reforms, corporate board decisions, and the IT sector’s reaction to the H-1B policy shift. Intraday volatility clusters may influence short-term trading behavior.

Quote of the Day

“The ‘American Dream’ for hopeful workers is going to be difficult. Companies will limit international travel and maximize work output from countries such as India, Mexico, and the Philippines.”
— Ganesh Natarajan, Former CEO, Zensar Technologies

Compliance & Disclaimer

This newsletter is for informational purposes only and does not constitute investment advice. Market data is sourced from multiple reliable platforms and validated for accuracy. Readers should conduct their own research and consult with qualified advisors before making investment decisions. Past performance does not guarantee future results.

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