The Trump administration’s decision to suspend access to the Permanent Labour Certification (PERM) programme for major Indian IT companies, including Tata Consultancy Services (TCS), Infosys, Wipro and HCLTech, has raised concerns over the long-term retention of experienced Indian technology professionals in the U.S.
While the immediate operational and financial impact is expected to be limited, a prolonged suspension could complicate talent management and accelerate the shift towards offshore delivery and alternative technology hubs.
PERM certification is a key step in the U.S. employment-based green card process, through which employers demonstrate that there are no sufficient, qualified and available U.S. workers for a position and that employing a foreign worker will not adversely affect the wages and working conditions of similarly employed American workers. Suspending access to the programme can delay the permanent residency pathway for affected employees, although it does not, by itself, invalidate existing H-1B visas or prevent employees from continuing to work under valid authorisations.
Peter Bendor-Samuel, founder and executive chairman of Dallas-based Everest Group, said the move would constrain how many employees the affected companies could sponsor for green cards and how quickly they could do so. However, given that permanent residency is a multi-year process, a delay of several months would be more frustrating than consequential for most employees.
“For the vast majority of Indian IT professionals who are waiting on green cards, this is a mild frustration, not a significant issue,” he said, adding that the suspension would become a more serious constraint if it remained in place permanently or across multiple administrations.
The implications could be more immediate for H-1B employees approaching the six-year limit on their visas, particularly those dependent on qualifying green card processes for extensions. Prolonged disruption could force some to consider changing employers or leaving the U.S., creating retention challenges for technology companies.
Avinash Vashistha, chairman and CEO of Tholons, the AI reinvention and global capability centre (GCC) company, said the disruption could be severe for affected employers because pending applications, as well as new applications, would be affected.
“The bigger signal is that PERM, which was always seen as a routine administrative step, can now be used as an enforcement tool. Every large sponsor in the U.S. will be reassessing its exposure,” he said.
Mr. Vashistha, formerly CEO and Chairman at Accenture India, warned that employees with pending applications or those yet to file, particularly those approaching their sixth year, were most vulnerable. The uncertainty could encourage experienced professionals to move to employers still able to sponsor their applications, increasing attrition and replacement costs.
However, data cited by ICICI Securities suggests that the direct exposure of Indian IT companies to the PERM route is limited. Of the 117,849 PERM applications filed between October 2024 and September 2025, Indian IT companies accounted for less than 2%, according to the brokerage. Infosys had no PERM cases since 2022, while Wipro, TCS and HCLTech received 523, 513 and 393 permanent-residency approvals, respectively.
ICICI Securities said the development was negative for Indian IT stocks in the near to medium term, primarily because of sentiment and longer-term talent-retention concerns rather than an immediate revenue impact. Existing employees can continue working with valid authorisations, while localisation and offshore delivery have reduced companies’ dependence on overseas visa routes.
TCS, India’s tech bellwether in a stock exchange filing, said its PERM applications had been in single digits over the past two years and that it did not expect the suspension to affect its workforce strategy or customer engagements. The company said its U.S. workforce strategy was anchored in local hiring, supported by campus recruitment, across 31 offices and delivery centres. It plans to hire another 15,000 people in the U.S. over the next five years.
Industry body Nasscom said Indian technology companies had significantly reduced their dependence on H-1B visas while expanding local hiring and building a strong domestic workforce in the U.S. Consequently, the number of employees transitioning from H-1B visas to permanent residency through PERM was relatively limited, it said.
The longer-term consequences, however, could extend beyond immigration paperwork. Mr.Vashistha expects the uncertainty to accelerate offshoring to India and nearshoring to Mexico, Canada and Latin America, particularly as artificial intelligence reduces the need for large onsite teams.
“Coming just weeks after the one-year extension of the $100,000 H-1B fee, this move tells boards and CFOs that restrictions on foreign talent are no longer a passing phase,” he added.
He estimated that the direct margin impact would be in tens of basis points rather than hundreds, with indirect costs arising from attrition, local replacement hiring and project transitions.
Bendor-Samuel, however, cautioned against overstating the immediate industry-wide impact, noting that the number of employees affected was unlikely to create significant operational disruption or materially alter near-term delivery decisions. The suspension would also have little immediate effect on margins, he said, given the limited number of employees involved and the availability of mitigation measures.
For India, the opportunity lies in converting the uncertainty into higher-value work for its GCCs and technology delivery centres. Mr.Vashistha insisted India could gain more mandates, but only if it rapidly deepened its leadership pipeline and specialised capabilities in AI, semiconductors and cybersecurity. Otherwise, competing destinations such as Poland, the Philippines, Mexico and Costa Rica could capture the work.
The immediate market impact may therefore be more about investor sentiment than earnings. The longer-term test for Indian IT companies will be whether they can retain critical U.S.-based talent while making their global delivery models less dependent on immigration pathways.
Published – October 09, 2026 06:21 pm IST
