US Blocks Green Card Path for Indian IT Firms; Why the Impact Could Be Limited

US Suspends Green Card Processing for Indian IT Firms: Why the Impact May Be Limited

The US administration’s move to restrict the route from H-1B visas to permanent residency may have a limited immediate impact on Indian IT services companies, as their share of employment-based green card applications has already declined significantly.

The US Department of Labor on Thursday suspended the processing of permanent labor certification applications, known as PERM, for several major technology and IT outsourcing companies, including Tata Consultancy Services (TCS), Infosys, Wipro, HCLTech and Cognizant. French IT services firm Capgemini was also included in the order. Microsoft and Adobe were suspended from the programme amid multiple active federal investigations, according to US Labor Department official Keith Sonderling.

Announcing the decision, Sonderling said the department would neither accept new applications nor process pending permanent labor certification applications involving the companies covered by the suspension.

However, available government data suggests that Indian IT services firms account for a relatively small proportion of overall PERM filings, potentially limiting the immediate effect on their US operations.

Indian IT Firms Account for Less Than 2% of PERM Applications

Data from the US Department of Labor shows that Indian IT companies collectively recorded fewer than 1,400 PERM cases out of 117,849 applications decided between October 2024 and September 2025. This represents less than 2% of the total.

According to the department’s fiscal year 2025 disclosure data, Wipro received 523 permanent residency approvals, while TCS recorded 513 and HCLTech received 393. Infosys, India’s second-largest technology services company, has reportedly had no PERM cases since 2022.

These figures are considerably lower than those of several US technology companies. Microsoft, for instance, was the country’s largest PERM filer in FY25, with 3,161 cases decided—more than twice the combined number reported for the six IT outsourcing companies named in the suspension.

The relatively small share of applications filed by Indian IT services firms suggests that the immediate disruption to their broader operations may be limited, although employees pursuing permanent residency could face delays and uncertainty.

US Cites Alleged Misuse of H-1B Visa Programme

The decision comes amid growing scrutiny of the H-1B visa programme, which allows US employers to hire skilled foreign professionals for specialised roles.

US officials have alleged that some companies have misused the programme to hire foreign workers at lower wages instead of employing American workers.

Vice-President JD Vance said the programme was intended to bring highly skilled professionals into the country for positions that could not readily be filled by American workers. He argued that it had become vulnerable to fraud.

The latest suspension adds another layer of uncertainty for foreign professionals seeking to transition from temporary work visas to permanent residency in the United States.

Existing H-1B Workers Will Not Automatically Lose Work Authorisation

Despite the announcement, the suspension of PERM processing does not automatically mean that employees already working in the US will lose their ability to work.

PERM certification is an important step in the employment-based green card process. It is separate from the H-1B visa itself, which governs temporary employment authorisation for eligible foreign professionals.

Phil Fersht, chief executive of HFS Research, said he did not expect an immediate disruption to project delivery as a result of the decision.

“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.

His assessment suggests that companies can continue relying on employees whose existing work authorisation remains valid, even as their permanent residency applications are affected.

Prolonged Suspension Could Create Long-Term Challenges

While the short-term operational impact may be limited, a prolonged suspension could create difficulties for Indian IT companies trying to retain experienced professionals in the US.

Fersht warned that uncertainty over permanent residency could increase employee attrition over the medium term, particularly among workers with specialised technical expertise, industry knowledge and strong client relationships.

“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 longer-term concern may therefore be less about an immediate halt to operations and more about retaining skilled employees, managing immigration uncertainty and ensuring continuity in client-facing roles.

The eventual impact will depend on how long the suspension remains in place and whether the affected companies can resume processing of their permanent labor certification applications.