Trump’s Targeting of Indian IT Firms Hits India-US Ties Again

The suspension blocks the companies from starting new PERM cases or advancing applications already pending. PERM is the labor-certification route commonly used to support employment-based permanent residency, often called a green card, for foreign workers. The decision therefore affects a pathway to long-term status, not the H-1B visa itself.

The eight companies are Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies, Capgemini, Microsoft, and Adobe. U.S. Labor Secretary Keith Sonderling said the government would accept no new applications and process none already pending that involved these firms.

The immediate impact is uncertainty for affected employees and employers. Infosys said it expected no material impact, while NASSCOM said Indian companies had reduced H-1B dependence and increased U.S. hiring. Ajay Srivastava still called the move a warning for India’s IT industry and possible protectionist signal.

PERM stands for Permanent Labor Certification. It is an employer-led process used when a company wants to sponsor a foreign worker for employment-based permanent residency in the United States. The certification is intended to establish that hiring the worker fits U.S. labor-market requirements. Approval does not itself grant a green card, but it is an important step toward one.

In practice, the employer files a PERM application for a specific job and worker. If the application is certified, the employer can continue the broader green-card process with U.S. immigration authorities. The article identifies technology companies and outsourcing firms as major users of this route.

The suspension matters because affected companies cannot submit new applications or process pending ones. That can delay workers’ permanent-residency plans and make long-term staffing harder. The article also notes that relatively few H-1B workers move to permanent residency through PERM.

India’s software and IT-enabled services exports are highly dependent on the U.S. market. The article says the United States accounts for 54.1 percent of those exports. That makes American policy especially important to Indian technology companies, workers, and the country’s export earnings.

The scale is visible in the revenue figures. India’s software services exports to the United States brought in $221.4 billion during 2025-26. That represented an 8.2 percent increase from the previous year. The figures show both the market’s size and its importance to India’s technology-services economy.

This concentration also creates vulnerability. Ajay Srivastava said Indian firms should widen their export markets to reduce exposure to sudden U.S. policy changes. The PERM suspension, along with pressure on H-1B visas, has raised concern that restrictions could extend beyond green-card sponsorship and affect the wider business relationship.

The PERM suspension interrupts a route that companies use to support foreign workers’ permanent-residency applications. Employees at the affected firms may see their green-card plans delayed or disrupted. Companies also lose certainty when planning careers, transfers, and staffing over several years in the United States.

The mechanism is direct. The Labor Department said it would accept no new PERM applications involving the eight companies and would not process pending ones. The affected firms include four major Indian technology companies: Cognizant, Infosys, Tata Consultancy Services, and Wipro, as well as HCL Technologies, Capgemini, Microsoft, and Adobe.

The short-term business effect may be limited. Infosys said it did not anticipate a material impact, and NASSCOM said companies had reduced H-1B dependence and increased local hiring. Still, Ajay Srivastava warned that the move signals a more protectionist approach and could foreshadow broader restrictions on foreign technology workers.

H-1B and PERM serve different stages of a worker’s U.S. employment path. The H-1B program allows foreign nationals to work temporarily in specialty occupations, while PERM is used by an employer seeking to sponsor a worker for permanent residency. One is temporary work authorization; the other supports a possible long-term status.

The connection occurs when an employer decides to retain an H-1B worker permanently. The company may begin a PERM case for that employee, and a successful labor certification allows the broader employment-based green-card process to continue. The article says the H-1B period can last a maximum of six years.

The relationship is not automatic. NASSCOM said relatively few workers move from H-1B visas to permanent residency through PERM, and Indian companies have reduced their H-1B dependence. Even so, suspending PERM can make long-term planning harder for workers and employers using this pathway.

The phrase angered India because it echoes a painful history of colonial exploitation. India’s Ministry of External Affairs called the wording deeply offensive and linked it to a historical legacy involving coerced or highly unequal labor arrangements. It also reminded the United States that America was built by immigrants.

The specific reference was to British colonial rule. After Britain abolished slavery in 1833, British authorities transported more than a million Indians to work as contract labor in colonies abroad. India viewed Vice President J.D. Vance’s description of foreign workers as “indentured servants” through that historical lens.

The dispute added an emotional and diplomatic dimension to the PERM decision. India said talent mobility benefits both economies and that the U.S. measures did not advance shared ambitions. The wording therefore intensified existing strain over immigration, trade, and the movement of Indian workers to the United States.

Companies move technology and business services across borders to obtain needed skills, operate efficiently, and support customers in different markets. Outsourcing sends defined work to an external provider. Skilled-worker migration moves people to where projects or clients are located. Global Capability Centers, or GCCs, are company-owned teams abroad that perform functions such as technology, finance, or research.

These models can overlap. An Indian IT firm may deliver software from India, send specialists to a U.S. client under temporary visas, or hire employees locally in the United States. A multinational may also build its own U.S. or Indian center instead of relying entirely on an outside vendor. The article specifically mentions outsourcing firms, H-1B visas, local hiring, and technology companies.

The article does not detail GCCs, but it shows why this system matters. The U.S. receives much of India’s technology exports, while Indian firms depend on access to American customers and workers. Policy restrictions can therefore reshape staffing, investment, and market diversification.