On October 8, the US suspended eight technology companies from the Permanent Labour Certification Programme, freezing pending applications and blocking new ones.

The companies are Tata Consultancy Services, Infosys, Wipro and HCLTech from India; Microsoft, Adobe and Cognizant from the US, and Capgemini from France.

The order is limited to PERM, a labour certification step used by employers to sponsor foreign workers, including H-1B holders, for green cards, or permanent residency. It does not itself ban H-1B applications, cancel existing H-1B status or block every green-card route.

These companies can continue applying for H-1B workers under the usual rules. H-1B applications follow a separate process involving a Labour Condition Application. This should help limit disruption to IT projects, although the freeze will affect employees seeking permanent residency and firms’ long-term staffing plans.

Choice of Firms Appears Selective
The freeze includes Infosys, TCS, Wipro and HCLTech, among India’s largest IT firms, while leaving out several major H-1B employers. Amazon, the largest visa recipient in the supplied ranking, was not included. Neither were Google, IBM, Meta, Apple, Intel or Accenture. Microsoft and Adobe’s inclusion suggests that the action extends beyond outsourcing companies. 

India-based delivery may cushion the impact

The restrictions will affect Indian IT firms’ US operations and Indian employees seeking permanent residency. However, the industry’s reduced reliance on professionals working at U.S. client locations may limit the wider impact.

According to the Reserve Bank of India, India’s software and IT-enabled services exports totalled $221.4 billion in 2025–26. The US accounted for $119.7 billion, or 54.1%, making it India’s largest market.

Globally, 91.7% of these exports were delivered from India and 8.3% by professionals working at overseas client locations. Applying this split to the US suggests that $109.8 billion was delivered from India and $9.9 billion through on-site work—less than 10% of export earnings from the US. Only a portion of this on-site work would depend on employees seeking green cards through PERM. This estimate uses worldwide delivery shares, rather than US specific figures.

Indian firms have changed their business model over the years, delivering more work from India while expanding local hiring and training in the US. Their US business now relies more on teams in India and local U.S. employees. This reduced dependence, together with continued access to H-1B applications, may help firms maintain project delivery despite the green-card sponsorship freeze.

India’s GCCs could Gain
The restrictions could also encourage growth in India’s Global Capability Centers. Of the eight listed companies, Microsoft and Adobe operate GCCs in India. The other six—TCS, Infosys, Wipro, HCLTech, Cognizant and Capgemini—provide IT and consulting services, and several help multinational companies set up and run GCCs.

If the freeze makes retaining overseas talent in the US harder, companies may move more engineering work, global projects and specialised teams to their India centres. This could create jobs and expand India’s role in technology development.

Comments
The US green-card sponsorship freeze is a warning for India’s IT industry. It covers four leading Indian IT firms and disrupts the permanent-residency plans of their employees, making long-term staffing in the US more uncertain. However, the order does not itself stop H-1B hiring, and most Indian IT services are delivered from India. Immediate disruption to client projects may therefore be limited, even as firms face greater difficulty attracting and retaining staff for US roles.

The larger concern is India’s dependence on a market that accounts for 54.1% of its software and IT-enabled services exports. The measure signals a more protectionist US approach to foreign technology workers. India should prepare for possible restrictions extending beyond green-card sponsorship to H-1B hiring, skilled-worker mobility and outsourcing. Indian firms should widen their export markets, strengthen delivery from India and expand local hiring where needed. India should also support AI and higher-value technology work to reduce its vulnerability to sudden US policy changes.