What is the US green card suspension, and does it hurt Indian IT?
The US has frozen PERM (Permanent Labor Certification) filings for several large employers, and analysts say Indian IT companies, including TCS, face limited near-term impact. These firms filed under 2% of PERM applications in the year to September 2025, and most have already cut their reliance on US work visas.
That’s the short version. The longer one has a few wrinkles.
What happened
PERM is the step an employer must clear before it can sponsor a foreign worker for an employment-based green card. The employer has to show it couldn’t find a qualified US worker for the role, which includes advertising the job through the state workforce agency. No certification, no green card sponsorship.
According to Reuters, Washington’s move is part of a wider push to reduce the number of foreign-born people in the US and narrow their route to permanent residency and citizenship. The suspension hit big names. Microsoft is on the list. So are the Indian IT majors TCS, Infosys, Wipro and HCLTech, plus Cognizant and Capgemini.
Cognizant was an early case. In September 2026, the US Department of Labor suspended its PERM filings amid a crackdown on alleged visa abuse, according to The Week. Cognizant’s H-1B petition approvals had already fallen to 3,510 in 2026, down from 9,413 in 2020.
US Vice President JD Vance has argued, without citing evidence, that companies use PERM to replace American workers with cheaper foreign ones. India’s foreign ministry pushed back on Friday. It said the steps don’t advance the shared ambitions of the two countries, and called the descriptions of Indian professionals unwarranted.
Why Indian IT firms are less exposed than you’d think
Two numbers explain most of the calm.
First, the share. ICICI Securities puts Indian IT firms at under 2% of PERM filings from October 2024 to September 2025. Second, the pipeline. Nasscom, India’s IT industry body, says relatively few workers move from H-1B status to permanent residency through PERM, and that member firms have cut their H-1B dependence while hiring more people locally in the US.
That shift didn’t start this month. After the US introduced a $100,000 fee on new H-1B petitions, TCS said it would stop new H-1B recruitment and lean on local hiring instead. Cognizant changed its job listings to require US work authorization without sponsorship. By the time the green card freeze arrived, the biggest exporters had already moved away from the model it targets.
What TCS said
TCS, India’s largest IT services exporter, told Reuters it doesn’t expect the suspension to affect its workforce strategy or client engagements. The company pointed out that it filed only single-digit PERM applications over the past two years.
That’s a small number for a company with a workforce this size. It tells you green card sponsorship was never a core tool for TCS in the US.
The risks analysts still see
Nobody is calling this a non-event.
ICICI Securities says the development is negative for Indian IT stocks in the near to medium term. Its reasoning: a hit to sentiment and longer-term talent retention, “rather than an immediate revenue impact.” If employees on temporary visas can’t see a path to permanent residency, some will leave. Prolonged uncertainty can push up attrition among staff based in the US.
Costs are the second issue. Sumit Singhania of Bajaj Broking told Reuters that companies relying more on US talent and subcontracting face higher hiring and compliance costs, which can squeeze margins.
The backdrop doesn’t help. India’s IT industry is worth about $315 billion, and its stocks are the worst performers among major Indian indexes in 2026, down about 25%. The sector is already dealing with AI-driven disruption and the H-1B fee hike. A green card freeze lands on top of both.
What this means for Indian IT employees in the US
If your employer was about to file PERM for you, expect delays. PERM is the first step, so a suspension on new filings stalls the whole sequence until it’s lifted. Existing green card applications further along the process are a separate question, and Reuters’ reporting doesn’t say they’re affected.
There’s a real tension here. Nasscom says few H-1B workers use this route. The Week notes that PERM is popular with TCS, Infosys, Wipro and HCLTech for sponsoring Indian staff. Both can be true: the filing volume is small for the company, and large for the individuals who depend on it.
Our take
The headline numbers say “fine.” The share prices say “nervous.” We think the second reaction is the more useful signal.
Less than 2% of filings means the revenue risk is small. But a company’s real exposure isn’t the filing count. It’s whether its best US-based engineers still believe they can build a life there. That’s harder to measure, and it’s why a 3% bounce in Nifty IT on the same day shouldn’t be read as an all-clear. The bounce came mostly from TCS’s upbeat second-quarter results, not from the green card news.
We’d watch attrition numbers in the next two quarterly reports. If US-based attrition ticks up at the firms named in the action, the sentiment risk is turning into a real one.
What to watch next
- Whether the US widens the freeze to more employers.
- How long the suspension lasts, and whether it faces legal challenge.
- Attrition and US hiring cost commentary in the next earnings calls from TCS, Infosys, Wipro and HCLTech.
- Further diplomatic response from New Delhi.
FAQ
Why did the US suspend green card filings for these companies?
The US says it’s tackling alleged visa abuse and wants to reduce the number of foreign-born workers who gain permanent residency. Vance has claimed, without evidence, that firms use PERM to replace American workers with cheaper foreign labor. The companies and India’s government dispute that framing.
What is PERM?
PERM stands for Permanent Labor Certification. It’s the first step in employer-sponsored green cards. The employer must advertise the job and show no qualified US worker is available before it can move to the next stage.
Will TCS be affected by the green card suspension?
TCS says no. It expects no change to its workforce strategy or client engagements, and it filed only single-digit PERM applications in the past two years.
How much of PERM do Indian IT companies use?
ICICI Securities estimates Indian IT firms accounted for under 2% of PERM applications between October 2024 and September 2025.
Is this the same as the H-1B visa change?
No. H-1B is a temporary work visa. PERM is the first step toward permanent residency. The US has acted on both: the $100,000 H-1B fee came first, and the PERM suspension followed.
What happened to Indian IT stocks?
Nifty IT rose about 3% on October 9, led by TCS after its second-quarter results. The index is still down about 25% for 2026.
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