US Suspends Green Card Sponsorship Route for Indian IT Companies: What It Means

US Green Card Curbs May Have Limited Impact on Indian IT Firms Despite H-1B Crackdown

The US administration’s decision to suspend green card-related labour certification processing for major technology companies may have a limited immediate impact on Indian IT services firms, as their share of applications has already fallen to a small fraction of the total.

The US Department of Labor has suspended the processing of permanent labour certification applications under the PERM programme for several major IT outsourcing companies, including Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech, Cognizant and Capgemini. Microsoft and Adobe have also been suspended from the programme amid multiple active federal investigations, according to US Labor Department official Keith Sonderling.

The decision means the department will not accept new or process pending PERM applications involving the companies covered by the order. These certifications are an important step for eligible foreign employees seeking employment-based permanent residency in the US.

However, the relatively low number of applications filed by Indian IT companies could limit the immediate business impact.

Indian IT Companies Account for Less Than 2% of PERM Cases

US Department of Labor data shows that the Indian IT companies covered by the suspension collectively accounted for fewer than 1,400 of the 117,849 PERM cases decided between October 2024 and September 2025. Their share was therefore less than 2% of the total.

According to the department’s fiscal year 2025 disclosure data, Wipro recorded 523 permanent residency approvals, followed by TCS with 513 and HCLTech with 393. Infosys, India’s second-largest IT services company, reportedly has not had any PERM cases since 2022.

The numbers are significantly lower than those recorded by some major US technology employers. Microsoft alone had 3,161 PERM cases decided in FY25, more than twice the combined total for the six outsourcing companies named in the suspension.

The figures indicate that the restrictions affect only a relatively small share of the overall PERM caseload associated with Indian IT firms, although the consequences could be significant for individual employees whose applications are delayed.

US Officials Allege H-1B Visa Programme Is Being Misused

The move comes amid heightened scrutiny of the H-1B visa programme, which allows US employers to hire foreign professionals for specialised occupations.

US officials have accused some companies of exploiting the system to hire foreign workers at lower wages instead of employing American workers.

Vice-President JD Vance said the programme was intended to bring in highly skilled professionals for positions that US employers could not readily fill with American workers. He also alleged that the system had become vulnerable to fraud.

The latest action adds to the uncertainty surrounding immigration pathways for foreign professionals employed by major technology and outsourcing companies.

PERM Suspension Does Not Automatically Cancel H-1B Work Authorisation

The suspension of PERM processing does not, by itself, mean that existing H-1B employees will immediately lose their ability to work in the United States.

PERM labour certification is a stage in the employment-based green card process. It is distinct from an H-1B visa or other work authorisation, which determines whether an employee can legally work in the country.

Phil Fersht, chief executive of HFS Research, said the suspension was unlikely to trigger an immediate disruption to project delivery.

“I would not expect an immediate project delivery crisis. PERM is not the same as an H-1B or other work visa; so, existing employees do not suddenly lose their ability to work because their green card process is suspended,” Fersht said.

This distinction could help companies maintain their existing operations in the short term, provided their employees continue to hold valid work authorisation.

Prolonged Restrictions Could Affect Talent Retention

Although an immediate operational crisis appears unlikely, a prolonged suspension could create challenges for Indian IT companies seeking to retain experienced professionals in the US.

Employees waiting for permanent residency may face greater uncertainty about their long-term future, potentially prompting some to consider other opportunities. This could be particularly challenging for companies that depend on experienced technology specialists, industry experts and client-facing personnel.

Fersht warned that the risk could increase if the suspension continues over the medium term.

“The risk becomes much greater over the medium term if the suspension persists. These firms depend on experienced domain, technology and client-facing talent in the US, and uncertainty around permanent residency can drive attrition precisely among the people they most want to retain,” he added.

For Indian IT services companies, the key concern may therefore be the long-term effect on workforce stability rather than an immediate disruption to ongoing projects.

The overall impact will depend on the duration of the suspension, the treatment of pending applications and whether the affected companies can resume the PERM process. While the low volume of applications may limit the broader financial impact, employees pursuing green cards could face considerable uncertainty.